As a seasoned analyst with over two decades of market experience under my belt, I find myself intrigued by the recent developments surrounding Ripple (XRP). The 25% surge in XRP’s price within 24 hours following Gary Gensler’s announcement to step down as SEC Chair is not just a remarkable move, but it also serves as a testament to the resilience of the crypto market and its investors.
In the past day, Ripple‘s (XRP) price surged by 25% due to Gary Gensler’s announcement that he will step down as the Chairman of the U.S. Securities and Exchange Commission (SEC), effective January 20, 2025.
This recent advance brings comfort to the “XRP Community,” who have grappled with stifled price movement due to constant SEC inquiries led by Chair Gary Gensler, and there’s more to unpack.
Ripple Bears Face Notable Liquidation Following Gensler’s Notification
It seems that Gensler’s statement could bring good news for the entire cryptocurrency sector. However, it appears that XRP holders might experience the most advantage. This is particularly noteworthy considering the ongoing legal disputes between Ripple and the SEC during Gensler’s term as chair.
Consequently, it was not unexpected that the price of XRP soared and surpassed all other cryptocurrencies in the top 10. In addition, this event led to liquidations worth approximately $26.11 million within the past day.
Liquidation happens when a trader doesn’t have enough collateral (margin) for a highly-leveraged trade, causing the platform to sell their holdings to minimize future losses. In the context of XRP, this liquidation mainly led to a situation where buyers were forced to purchase XRP rapidly due to market dynamics, often referred to as a “short squeeze”.
In simpler terms, a “short squeeze” occurs when many traders who had bet against an asset’s price increase (those expecting the price to fall) are compelled to reverse their positions due to market movements. This mass buying action pushes the asset’s price upward as these traders scramble to buy back the asset they had previously sold short.
As we speak, each XRP is being traded for approximately $1.40, giving it a total market value of around $80.64 billion. Following the possible departure of Gensler, crypto attorney John Deaton suggested that the price increase for XRP could be even greater, potentially pushing its market cap up to an impressive $100 billion.
“XRP soon will achieve a $100B market cap. Times are changing,” Deaton wrote on X.
Currently, CryptoQuant’s data indicates a substantial drop in the amount of XRP transferred to exchanges. Generally, large numbers suggest heightened selling pressure on the open market. This trend could be indicative of investors unloading more assets, which might lead to a potential decrease in price.
On the other hand, given its low current price, XRP investors appear reluctant to sell. If this trend continues, the token’s value might surpass $1.40.
XRP Price Prediction: $2 Coming?
Since November 18, as per the 4-hour chart analysis, XRP’s trading activity has been confined between $1.04 and $1.17. This sideways trend has resulted in the formation of a “bull flag,” which is a bullish chart pattern indicative of potential future price increases.
The bull flag pattern starts off with a strong price rise, which forms the ‘flagpole,’ due to a surge in buyers overpowering sellers. Then comes a period of moderation, during which the price pulls back slightly and oscillates between two sloping lines, thus shaping the ‘flag.’
Yesterday, XRP managed to break free from its previous trend, indicating that buyers are now in charge. If this positive trend continues, there’s a possibility that XRP’s value might go beyond $1.50, even reaching close to the $2 mark.
Conversely, the optimistic outlook for XRP is contingent upon market dynamics. Should investors choose to realize their profits by selling, a surge in supply might drive down the price of XRP, potentially undoing its recent growth spurt.
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2024-11-22 12:32