Ripple’s Surge Sparks Speculation: Will Short Positions Get Liquidated?

Ripple (XRP) $2 attracted significant attention with a 500% increase projected for Q4 2024. This parabolic rally has prompted many traders to sell in hopes of realizing gains during the downturn. However, data indicates that if XRP surpasses a critical resistance level, approximately $80 million in short positions could face liquidation.

Risk of Short Position Liquidation

XRP is currently at a pivotal point, demonstrating consolidation behavior on both weekly and monthly charts. The token is trading at $2.335, showing major user interest with a market cap of $134 billion. According to CoinGlass data, this interest leads to high speculation, and if the $2.40 resistance is breached, short positions may be forcibly closed.

MAXPAIN analyst noted that XRP is trapped in a symmetric triangle formation, preparing for a breakout:

MAXPAIN: The XRP price is confined in a symmetric triangle, gearing up for an exit. BBW approaches local low levels; an exit is near. However, the symmetric triangle creates directional uncertainty.

If the price rises above $2.40, around $80 million in short positions could be liquidated. Typically, such closures can trigger buying pressure, causing the price to rise rapidly.

Alternative Scenarios and Support Levels

The four-hour RSI indicator is stiff at the 50 level, signaling a bearish trend. If a move above this level is rejected, the downtrend may strengthen, and prices could fall to support levels of $2.07, $2.00, and $1.90. Previous predictions by CoinGape suggest the price could dip to $1.50 before experiencing a significant rally.

Following Ripple’s news, if XRP surpasses the $2.40 resistance level, it will face the liquidation of $80 million in short positions. This scenario could trigger a strong upward trend, while technical indicators suggest continued fluctuations at low-high levels.

The future of XRP will depend on how closely traders monitor market movements. The direction in which prices will move remains uncertain, influenced by technical analysis and market dynamics.