XRP Price Dipped Below $2 After Failed Circle Acquisition, But This Could Spark a Bullish Recovery to $3

Ripple (XRP) price slipped from a daily high of $2.24 to a daily low of $2.13 on May 1, as traders reacted to news around the failed acquisition of USDC stablecoin issuer Circle. This dip triggered a liquidation imbalance, as some traders with open long positions were forcefully closed, causing a surge in sell-side pressure. However, after this crash cleared key liquidation levels below the price, Ripple seems ready for a bullish recovery to $3.

XRP Price in Focus Amid Liquidation Imbalance

As data from CoinMarketCap shows, XRP value today stands at $2.23, and the cryptocurrency’s trading volumes have risen by 19% to reach $3.42 billion. After managing to recover above the $2.20 support level, traders will now be keeping an eye on whether this altcoin could break out from its tight trading range and surge past $3.

This recent drop in XRP price also caused a 1,000% liquidation imbalance according to analyst ALT4F. In the last 24 hours, more than $14 million long positions on XRP were liquidated, the highest level in three weeks, while short liquidations came in at around $1.5 million, as per data from Coinglass.

As analyst ALT4F pointed out, the high number of long liquidations indicates that more traders are opening long positions as they anticipate the XRP price may rally. While this long bias suggests that the bullish sentiment towards Ripple is strong, it may also have a negative impact.

For instance, if Ripple plunges below $2.15 under the current market conditions where leverage is notably high, it could trigger a cascade of long liquidations that will push the price further down, and possibly cause a breach of the $2 support level.

Analyst Highlights Crucial XRP Price Levels

But if XRP breaks out from its tight trading range and pushes above $2.30, then it is likely to avert the risk posed by long traders and rally past $3. Moreover, the liquidation heatmap shows that there is a hot liquidation zone above the price at $2.34, and if XRP can get to this level, the ensuing short liquidations may spark a sustained rally towards $3.

As this heatmap shows, there is a cluster of liquidation levels above price, and if Ripple can rally to clear these levels, the wiped short positions could spark a surge in buying pressure and make a bullish case for the altcoin.

Technical Analysis: XRP Poised For Breakout

The XRP one-day price chart shows that the altcoin is at a pivotal point, which may explain why it has been consolidating within a tight range as traders hold positions to await a breakout.

XRP is currently testing resistance from the upper descending trendline of a parallel channel, and if it is successful in breaking out above $2.33, it might extend the rally to $2.61, and this will clear the way for a run up to $3.

The RSI supports this bullish thesis as it rises with higher highs, with the reading of 55 showing that the momentum is bullish. Meanwhile, the on-balance volume is still at range highs, an indication of a strong upward trend.

These technical indicators and the pending breakout support indicate that an XRP price breakout to $3 is next, and if this plays out, traders should await new highs. However, short-term fluctuations may impact liquidations, and considering the high leverage towards Ripple, a slight dip could spark a cascade of long liquidations and push the altcoin lower.

Frequently Asked Questions (FAQs)

1. Is a bullish recovery for XRP price to $3 next after the recent liquidation imbalance?

After hitting a daily low of $2.13, Ripple (XRP) price managed to recover to $2.20, showing signs of a rebound despite the massive liquidation imbalance that occurred during the morning trading session.

2. What does Ripple’s liquidation heatmap show?

As the cryptocurrency market continues to be volatile, a slight move in either direction could drastically affect the price and trigger a large-scale liquidation cascade.

3. What’s the most crucial resistance level for the Ripple price?

If the buyers manage to push the price above the 2.34 zone, it could attract more buyers and increase the selling pressure.