XRP Technical Analysis 2023
Key Insights
- The XRP price surged by over 100% following positive news about the Ripple lawsuit.
- The sharp rise was likely fuelled by a short squeeze, as prices rising above $0.6 triggered stop losses, forcing short positions to close.
- Residual enthusiasm could push XRP to $0.9 or $1 before a significant correction occurs.
In light of the long-awaited decision regarding the Ripple-XRP lawsuit, the price of XRP (the digital currency representing Ripple) suddenly surged by over 100%.
XRP Daily Timeframe
Let's examine this event in more detail, focusing on technical aspects. Here’s the XRP chart on the daily timeframe.
Since the beginning of 2023, the coin's price approached the $0.6 mark twice. This price level has served as a resistance level since September 2022. The volume profile for the entire year indicates the formation of a significant volume level around $0.4750.
After the fourth approach to the resistance level near $0.6, the XRP price stabilized around this volume level. Subsequently, there was a breakthrough of the resistance level near $0.6 by 100%.
It is noticeable that this significant resistance level near $0.6 attracted a large number of market participants who actively placed their sell orders, anticipating further price decline for XRP. The breakout of this level led to the liquidation of short positions totaling $31.21 million.
A price increase in XRP, which could have been triggered by the stop orders from participants holding short positions, followed by the liquidation of these positions in the market. This could explain the sharp price movement we are witnessing.
The triggering of short sellers' stop orders can occur when the asset's price exceeds a certain level set by market participants to limit their losses. When the XRP price rose above the resistance level near $0.6 and continued to rise, it could have triggered stop orders and active buying of XRP to close short positions.
XRP Price Prediction
As a result, the demand for XRP increased, leading to further price growth. However, it is important to note that such movements can be temporary and based on short-term market reactions.
In the near future, we can anticipate a small price increase for XRP towards levels ranging from $0.9 to $1, driven by residual enthusiasm associated with the latest news. After this, though, a significant corrective movement is possible.
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