XRP Price Prediction: Could $40 Million in Liquidations Lead to a Rebound?

Summary:
Ripple's XRP has seen a 4.62% decline in the last 24 hours, correlating with Bitcoin's drop below the local support of $94.5k, leading to over $40 million in liquidations. While $1.96-$2.00 is identified as a crucial support zone, traders are left wondering if a rebound will occur or if bears will continue to dominate.

Key Takeaways

XRP dropped 4.62% recently, following Bitcoin's decline, triggering $40.74 million in liquidations.
Key support for XRP is between $1.96 and $2.00.
The current bearish dynamics may signal buyers to consider purchasing during this dip.
Traders should be cautious; prices below $1.81 could indicate trouble for bulls.
Ripple has obtained licensing approval in Luxembourg, enhancing its operational presence in the EU.

XRP price prediction: Here's why you should buy XRP at sub-$2 prices

Current Market Dynamics

Ripple's XRP price took a hit, falling 4.62% in just 24 hours as Bitcoin's value dipped below the $94.5k support level. As a result, the cryptocurrency experienced $40.74 million in liquidations, predominantly from long positions, totaling $39.50 million. According to a recent report from AMBCrypto, the $1.96-$2.00 range represents a significant support zone for bullish traders. This is bolstered by data from the Cost Basis Distribution Heatmap, along with the historical importance of this area over the past two months.

Recently, XRP's volatility has caused it to retest this critical support level. The big question now is whether traders can expect a robust rally from this point.

XRP Price Prediction - Caution Advised

XRP 1-week Chart
Source: XRP/USDT on TradingView

On the weekly chart, XRP shows a bullish swing structure; however, internally it exhibits bearish signals. Additionally, it is positioned below the 78.6% Fibonacci retracement level. The On-Balance Volume (OBV) has been declining since September, and the Moving Average Convergence Divergence (MACD) is below the zero line, indicating that momentum is currently shifting downward. Together, these indicators suggest that bears are currently in control of the market.

Nevertheless, XRP is trading within a demand zone that has proven resilient since December 2024. This situation makes it appealing for buyers with relatively low risks and higher potential rewards if the market rebounds. The recent spate of liquidations may have inadvertently created a liquidity sweep, potentially establishing conditions for a local bottom.

Traders’ Call to Action - Time to Buy the Dip

XRP 4-hour Chart
Source: XRP/USDT on TradingView

A breakout above $2.28 marked a bullish reversal on both the 4-hour and 1-day charts. Fibonacci retracement levels indicate that local support exists at $2.01 and $1.90, both of which lie within the demand zone that XRP bulls have successfully defended thus far. Thus, traders may consider purchasing XRP between $1.90 and $2.01.

However, caution is warranted; a drop below $1.81 could raise concerns regarding the stability of bullish trends, while a close below $1.77 would invalidate the bullish outlook. For those looking to take profits, target ranges include $2.30-$2.40 and $2.55-$2.60, with Bitcoin's performance at $101k and $107.5k also likely to affect XRP sentiment.

In other developments, Ripple has announced it received approval from Luxembourg’s financial regulator. This is a significant milestone for scaling Ripple Payments throughout the European Union.

Final Thoughts

Disclaimer: The information provided is based on the writer's opinions and should not be considered as financial, investment, or trading advice.