The Ripple (XRP) price has attracted the attention of many investors due to its 500 percent rally in the last quarter of 2024. Due to its parabolic rally, many traders are shorting the token, hoping to profit from its decline. However, data shows that about $80 million worth of short positions will face liquidations if the price breaks a critical resistance level.
Risk of short liquidation for Ripple (XRP): $80 million at stake
Ripple (XRP) is at a pivotal point with weekly and monthly charts showing consolidation behavior. Currently, the token is trading at $2.335 with a market capitalization of $134 billion, showing intense user interest. CoinGlass data shows that with this interest comes increased speculation, as around $80 million worth of XRP short positions face liquidations if the price breaks the $2.40 resistance level. This means that short positions will be closed at a loss. Of the $80 million short sellers, $8.08 million are from Bybit, $2.51 million from OKX and $8.42 million from Binance. The rest of the short positions belong to various popular cryptocurrency exchanges.
High leverage is possible when volatility falls. Traders often open positions in anticipation of big gains on the breakout. As the MAXPAIN analyst noted, XRP is stuck in a symmetrical triangle pattern and is waiting for a breakout rally. According to the analyst, if the price rallies above $2.40, about $80 million worth of short positions in XRP will be liquidated. Usually, when short positions are closed due to a stop loss or margin call, buying pressure is created by buying tokens. If buyers time it well, there is a big jump in bullish momentum that triggers a parabolic rally. But is this currently the case for XRP? Not very likely.
What are the prospects for XRP price?
The four-hour RSI is showing a downtrend as the average struggles around the 50 level. A move above this level could result in a rejection, giving the bearish momentum a chance to take over. Such a development could signal a decline in price. This outlook seems more likely given the lower highs XRP has produced since early December 2024. According to the analyst, if such an outlook emerges, some important support levels to watch are at $2.07, $2 and even $1.9, according to crypto analysts’ estimates.
In conclusion, according to analysts, after the uptrend, XRP has reached a critical point with the Ripple news. This situation foresees the liquidation of short positions worth $80 million if Ripple breaks the resistance level of $2.40. Eventually, this could fuel a rally and trigger a breakout to the upside. In such a case, $2.90, $3 and $3.5 are key resistance levels to watch.
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