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XRP sees long positions hunted and a sharp reversal; here’s what can come next

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XRP sees long positions hunted and a sharp reversal- here's what can come next
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

  • The daily timeframe charts of XRP have been bearishly biased since late October
  • The range formation in early November was respected, but another wave of selling is expected

XRP traded within a range after the sell-off during the FTX saga. The lows of this range offered support once more in recent days, but it was likely that a move upward would offer sellers another opportunity.


Read XRP’s Price Prediction 2023-24


Bitcoin has been extremely still in recent days. A breakout toward or past $18.2k for BTC could trigger a shift in sentiment across the altcoin market. Until then, it remained likely that shorting any bounces in price would be profitable.

The liquidation of long positions was followed by a reversal but demand was not strong

XRP sees long positions hunted and a sharp reversal- here's what can come next

Source: XRP/USDT on TradingView

The market structure of XRP flipped bearish when the price slid beneath the mid-range mark at $0.37 on 16 December. Since then, the price has tested the range lows at $0.333 as support and bounced back to $0.37.

This bounce saw XRP form a bearish order block, a region dominated by sellers. Combined with the bearish market structure on the daily timeframe, it indicated that a revisit to this region of resistance was likely to face rejection once again.

Hence, short sellers can look to enter near the $0.362-$0.37 area. Their stop-loss can be set in the vicinity of $0.375, as a move above $0.374 would invalidate the bearish idea. Traders can also look to manually close the trade on a daily session close above $0.373, leaving more room for upward wicks.

To the south, bearish targets include $0.333 and $0.3 for ambitious bears.

Both long and short positions were liquidated while Open Interest declined

XRP sees long positions hunted and a sharp reversal- here's what can come next

Source: Coinalyze

Over the past couple of days, XRP saw a violent move downward which was quickly reversed. This could have been a hunt for liquidity before a strong move upward. Hence, the bears must temper their enthusiasm.

Coinalyze data showed $2.4 million worth of long positions liquidated within a single hour on 2 January, when the price dropped to $0.3 before bouncing quickly back to $0.353 a mere 14 hours later.

The Open Interest charts showed a significant decline in OI, indicative of discouraged or liquidated long positions. This highlighted bearish sentiment. The price and OI need to stabilize for some time before bulls can expect a move upward.

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Akashnath S is a Senior Journalist and Technical Analysis expert at AMBCrypto. He specializes in dissecting price action, identifying key market trends through advanced chart patterns, and forecasting both short-term and long-term asset trajectories. His distinct analytical method is grounded in his academic training as a Chemical Engineer. This background provides him with a systematic, process-oriented approach to market data, enabling him to analyze the complex dynamics of financial markets with precision and objectivity. Having actively covered the cryptocurrency space since the landmark 2017 market cycle, Akashnath possesses years of experience navigating both bull and bear markets. This seasoned perspective is critical to his insightful reporting on market volatility and evolution. As an active market participant, Akashnath enhances his analysis with crucial, hands-on experience. This practical application of his technical skills ensures his insights are not merely theoretical, but are also relevant and actionable for an audience looking to understand and navigate trading opportunities. He is dedicated to educating readers on the nuances of technical analysis, empowering them with the knowledge to make more informed financial decisions.
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