The price of XRP is currently at a significant point of interest as it tests crucial support levels. Analysts are closely monitoring whether the asset can maintain its footing above the $2.00 threshold, following a volatile start to the year. The recent technical indicators, particularly a rare 5-day MACD Golden Cross, have sparked optimism amongst traders, suggesting a potential upward shift in market sentiment.
As of now, XRP has shown resilience by reclaiming the $2.10 mark. The Golden Cross formation, which has not appeared since July, indicates that bullish momentum might be building. This is further supported by a change in the MACD histogram from red to green, suggesting that selling pressure is easing and buying interest may be rising.
Daily trading volume for XRP has been robust, reported at approximately $3.86 billion. Such activity reflects a highly engaged market, yet it is critical for the price to stay above $2.00 to maintain a bullish outlook. A drop below this level could jeopardize the positive sentiment surrounding XRP.
In terms of liquidity, XRP has seen its balance on exchanges plummet to a seven-year low. This decline in available supply indicates that even minor increases in demand could lead to substantial price hikes. Earlier this year, this reduced liquidity helped push XRP to a peak of $2.41.
Spot XRP ETFs have also played a role in the recent price dynamics, attracting nearly $2 billion before experiencing a minor outflow. Despite this recent exit, the Market Value to Realised Value (MVRV) ratio stands at 1.04, suggesting that average holders are just marginally in profit. Historically, elevated MVRV ratios indicate an overheated market, and since the current figure is far from previous peaks, there remains significant potential for growth.
Traders are currently engaged in a leverage battle, as highlighted by the liquidation heatmap. One critical zone lies between $2.40 and $2.60, where a concentration of short positions could trigger a short squeeze, propelling the price upward. Conversely, the “Wall of Pain” exists between $2.00 and $2.15, where many long positions from retail traders are concentrated. A slip into this range could catalyze a flash crash as over-leveraged traders might be forced to liquidate their positions.
Breaking through the $3.00 psychological barrier remains a key goal for bullish traders this year. Positive sentiment among holders has shifted for the first time since October, indicating a growing optimism about the future of the Ripple ecosystem. Should buyers defend the $2.00 support effectively, the pathway to $3.26 could become more attainable.
