The recent decline in XRP’s value has triggered a drop in the number of addresses holding significant amounts of the cryptocurrency, signaling a loss of trust among large investors.
Despite positive sentiment, as indicated by the Weighted Sentiment Metric, the article suggests caution, pointing to potential risks for both long and short positions amid XRP’s turbulent market.
The recent turbulence in the cryptocurrency market has left investors questioning the once-prominent XRP’s long-term viability. A closer look at the XRP Ledger reveals a significant drop in the number of addresses holding 100 million to 1 billion XRPs between January 24th and 25th, indicating a loss of trust among some major holders.
The decision to exit the XRP market seems correlated with its recent price action. At $0.50, XRP has experienced a 19.18% decline in the last 30 days, losing nearly 50% of its value since its peak after Ripple’s SEC victory last year.
Bitcoin maximalist Max Keiser did not hold back, referring to XRP as “centralized garbage.” Despite this negative sentiment, the Weighted Sentiment Metric currently stands at 0.71, suggesting a prevailing optimistic outlook among participants.
However, optimism alone might not be enough to ensure a quick recovery. Analyzing Liquidation Levels and Cumulative Liquidation Levels Delta (CLLD) reveals potential risks for both long and short positions. Traders opening long positions at higher points, especially above $0.51, face increased chances of liquidation. On the other hand, shorts targeting the $0.48 to $0.49 range have a lower risk of liquidation.
Navigating XRP’s Storm: The Short-Term Strategy Amidst Uncertainty
As the CLLD takes a negative turn, latecomers to short positions might be at risk of liquidation, highlighting the complexity of the current market dynamics. While XRP’s price could dip to $0.48, a swift recovery may hinge on factors beyond market sentiment, emphasizing the need for cautious and strategic trading in the coming days.
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