XRP Surges as “Short Squeeze” Erases Days of Losses; What Comes Next?
- XRP has been facing some immense pressure over the past few days and weeks, with the recent SEC lawsuit and an onslaught of exchange delistings rocking its price action
- The crypto is now trying to gain some momentum, with bulls stepping up and propelling the token higher overnight following a break above a key technical pattern
- Where the token trends in the mid-term will undoubtedly depend largely on whether or not bulls can sustain their momentum
- With its fundamental strength growing weaker by the day, there’s a strong possibility that XRP’s price will continuously slide lower over the coming weeks
- Drying volume, limited access for US residents, and uncertainty regarding its future may all hamper its outlook
XRP has been one of the worst-performing major altcoins throughout the course of this recent bull run. After seeing a parabolic rally that sent it from lows of $0.25 to highs of $0.90, the cryptocurrency began a descent that is still ongoing.
This rally’s timing was quite interesting, as it coincided with the Spark token airdrop and resulted in XRP seeing its first parabolic move in years.
After the dust settled and its price stabilized around $0.50, the SEC filed a lawsuit against Ripple, accusing them of conducting an unregistered security offering – among other things.
XRP Faces Immense Pressure as Fundamental Weakness Grows
At the time of writing, XRP is trading up over 10% at its current price of $0.24. This marks a massive surge from its weekly lows of $0.17 set just a few days ago.
The crypto has been holding steady above its $0.20 support level, but it remains unclear where this buy-side support is coming from.
Apart from Kraken, nearly every major U.S. exchange has announced plans to delist the token later this month.
This will force holders to either sell, hold in hopes Ripple winning the lawsuit with the SEC, or use decentralized trading platforms.
Latest Rally the Result of a Technical Breakout
XRP’s massive move up overnight has likely come about due to a combination of a technical breakout and a short squeeze.
Funding rates for short positions across margin trading platforms had been quite extreme, which may explain this rally.
One analyst also noted that it was pushing against a symmetrical triangle pattern before the move, which may have sparked a flurry of buying pressure from swing traders.
“XRP symmetrical triangle, could really break either direction, no real bias here. Either direction should give a nice little pop. Money to be made here.”
Image Courtesy of Jonny Moe. Source: BTCUSD on TradingView.
The coming few days should shed some serious light on XRP’s outlook, and its immense fundamental weakness may cause every bounce to be aggressively sold into.
Featured image from Unsplash. Charts from TradingView.
OhNoCryptocurrency via https://www.ohnocrypto.com/ @Cole Petersen, @Khareem Sudlow