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XRP Faces Huge Liquidation If $2 Support Fails – Here Is Why
The recent price consolidation of Ripple’s native cryptocurrency, XRP, has left many traders and investors uncertain about the direction of its next price action. Despite strong fundamental news, such as the potential closure of a long-standing lawsuit with the U.S. Securities and Exchange Commission (SEC) and the approval of an XRP spot ETF to trade in Canada, the price has struggled to break above its key resistance level of $2.6 and instead remains trapped in a range between $1.9 and $2.
As the cryptocurrency continues to wrestle with this psychological barrier, traders who have taken long positions are at risk of facing significant liquidations if the price fails to hold onto this critical support level. According to on-chain data from Coinglass, short sellers have gained dominance in recent days, suggesting that many investors have placed bearish bets against XRP.
A breakdown below $2 would likely trigger a cascade of long liquidations as traders and whales scramble to cut their losses. This could lead to a sharp price decline towards the next key support zone at $1.6, which may prompt buyers to enter the market, potentially driving prices higher.
The current price action is reminiscent of the last few months’ events in the crypto markets, where XRP faced immense selling pressure as it struggled to break above its previous resistance level. Despite these issues, XRP’s fundamentals continue to improve, and traders would do well to monitor the cryptocurrency closely for any signs of a bullish reversal.
Traders should be cautious and consider hedging their positions if they are holding longs at or near $2. Failure to hold onto this support could lead to severe losses for those who have taken on excessive risk in the hopes of recouping potential profits from XRP’s future upside.
Source: usethebitcoin.com
