XRP holds its breath at $1.4, where will it bounce in the liquidity swamp before the storm?

▲ XRP/ChatGPT generated image ©

XRP (Ripple), trapped in an endless sideways market, is accumulating massive liquidity bombs both above and below, signaling explosive price volatility. Amidst this, an expert has issued a sharp warning against unrealistic optimism, such as claims of a $1,000 breakthrough circulating in some parts of the market.

According to crypto media outlet Bitcoinist on April 29 (local time), virtual asset analyst Ted Fellowes diagnosed that despite Bitcoin (BTC)'s clear upward trend, XRP has been consolidating around $1.40 for weeks, failing to find direction. Unlike the usual market flow where altcoins follow the leader's rise, XRP's current stagnant movement indicates typical market indecision, with both buyers and sellers building positions while awaiting a breakthrough.

Fellowes analyzed that this long-term consolidation has created huge liquidity pockets on both sides of the market. First, near the upper bound of $1.5, a large volume of stop-loss orders from traders betting on an XRP decline is concentrated. If the price breaks above $1.5, their defenses will be forcibly triggered, sparking a short squeeze (buying pressure resulting from the liquidation or covering of short positions) and acting as a powerful catalyst to send the price soaring vertically.

Conversely, below the lower bound of $1.4, another cluster of liquidity is concentrated, consisting of stop-loss orders from long-position buyers expecting a rise. If the price falls below this support level, a series of forced liquidations could occur, leading to a temporary price collapse before a potential rebound. Consequently, XRP is currently compressed, with massive liquidity positioned above and below acting as magnets pulling the price, accumulating pressure to release its suppressed direction soon.

Meanwhile, another virtual asset analyst, Chartnerd, strongly criticized the excessive optimism recently circulating in the market. He asserted that claims of XRP reaching $1,000 are highly unrealistic, and instead, warning of a $1 collapse is a more realistic analysis based on historical chart data.

According to his explanation, in every past bear market, XRP has repeatedly plummeted to the lower regression band of the Gaussian channel, experiencing painful price drops. Based on this historical trajectory, Chartnerd added that rather than being swayed by blind and meaningless expectations of a surge, one should be vigilant and prepared for a downside scenario where it could fall back below $1.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*