XRP has displayed volatility over the past week, raising questions about its long-term prospects. Currently, the coin is trading around $3.19.
Rising Exchange Reserves
XRP is trading at approximately $3.19 after experiencing a decline from a local high of $3.65. Recent data indicates that XRP reserves on exchanges have increased from $2.9 billion to $3.5 billion, leading to greater market supply of tokens. This may suggest that trader participation in selling is increasing, thereby putting additional pressure on XRP's price.
XRP Liquidation Clusters
The liquidation map analysis shows that many traders betting on price increase have positioned themselves just below the $3.20 mark. This suggests that if the price falls below $3.21, liquidation could occur, resulting in additional downward pressure. If the price drops, it could trigger a chain reaction of selling, moving it toward $2.97 and $2.66.
Price Patterns and Warnings
On the daily chart, XRP has printed a bearish engulfing pattern, which typically signals a potential downturn. Additionally, the $3.21 level stands out as critical, aligning with Fibonacci levels and the completion of a fifth wave in Elliott Wave theory, creating significant resistance to growth.
Current data and patterns suggest potential increased volatility for XRP. Investors should closely monitor the $3.21 level, as a drop below it could result in substantial losses.
