XRP encounters a substantial imbalance in liquidation due to its price dipping beneath $2.20.
Let's Talk XRP: A Rollercoaster Ride and the Aftermath of the $2.15 Plunge
The crypto world saw a bump in the road when XRP briefly dipped to $2.15 on Apr. 30, causing a major stir in the liquidation market. This price drop resulted in a whopping $13.9 million in long positions getting liquidated in a day, a near 1000% imbalance when compared to the $1.49 million in shorts. This stark imbalance indicates a strong long bias among traders.
When prices tumble, too many long positions can get wiped out in a flash, as seen in this instance, triggering a rapid slide. Open interest fell by 4%, showing many traders were bailing out of their positions.
However, XRP has since rebounded to around the crucial psychological support level of approximately $2.20. Some traders view this as a "flush," a method to shake out weaker hands ahead of a potential reversal, while others fear another decline could lead to more liquidations and panic selling.
This sudden dip occurred at an unusual time when traders were anticipating ongoing upward momentum. XRP has made significant strides this year. The Securities and Exchange Commission (SEC) recently halted its appeal against Ripple, paving the way for the company to potentially collaborate with U.S. banks in the near future.
The news of Ripple's $4 - $5 billion offer to acquire Circle was a topic of discussion in the financial circles. However, opinions differed on the valuation, with Bloomberg stating it as too low. Ripple also launched a new stablecoin, RLUSD, which quickly gained traction, crossing $300 million in market cap. Additionally, over ten firms have applied for XRP spot exchange-traded funds, with analysts predicting 80% or higher odds of approval.
Another catalyst that might boost the volume of the XRP Ledger is Ripple's recent acquisition of Hidden Road, a broker that handles more than $10 billion in transactions daily.
From a technical standpoint, XRP is trading in a tight range with no clear momentum in either direction. The $2.15 and $2.30 levels are critical to keep an eye on in the short term. Most technical indicators currently suggest a neutral outlook. There's a slight bullish bias indicated by the moving average convergence divergence (MACD) indicators, which are pointing slightly upward.
If XRP maintains above the $2.15 - $2.20 range and breaks above $2.30, it could signal a shift towards a bullish trend, aligning with recent positive developments for Ripple. Conversely, failure to hold above $2.15 could lead to another round of long liquidations, with the market still heavily leveraged as suggested by the current imbalance.
On an unrelated note, Trump took a dig at Biden, accusing him of the weakened markets, blaming him for the turbulence in the GDP and tariff situations.
[1]Source: CoinMarketCap[2]Source: Cointelegraph
- The $2.15 plunge of XRP on Apr. 30 caused a significant imbalance in the liquidation market, with a massive $13.9 million in long positions getting liquidated compared to just $1.49 million in shorts.
- XRP's price drop resulted in open interest falling by 4%, indicating that many traders were bailing out of their positions.
- After the plunge, XRP rebounded to around $2.20, with some traders viewing this as a "flush" to shake out weaker hands before a potential reversal, while others fear another decline.
- The SEC's decision to halt its appeal against Ripple has paved the way for the company to potentially collaborate with U.S. banks, which could be a major positive development for XRP.
- Ripple's $4 - $5 billion offer to acquire Circle was a topic of discussion in financial circles, but opinions differed on the valuation.
- Ripple's acquisition of Hidden Road, a broker handling more than $10 billion in transactions daily, could serve as a catalyst to boost the volume of the XRP Ledger.
- From a technical standpoint, XRP is currently trading in a tight range, with the $2.15 and $2.30 levels being critical to watch in the short term. The MACD indicators suggest a slight bullish bias.
- In tech news, Trump accused Biden of weakened markets and criticized him for the turbulence in the GDP and tariff situations, an unrelated note to XRP finance and investing.
