- XRP has reached a key supply zone, making this a critical area for potential short entries—if the price reacts
- Liquidity clusters below the current price could attract XRP for a deeper move down before a possible bounce
- Risk management is crucial: break-even stops are key, as XRP’s next move remains uncertain and highly reactive
In our last analysis, we highlighted an interesting liquidity zone above XRP’s price and discussed the possibility of the asset moving higher after reacting to a demand zone.
And guess what? XRP did just that. The price dipped into an M15 demand zone, reacted strongly, and climbed to reach the supply area we previously marked.
Liquidity Explained
Before diving deeper, let’s quickly define liquidity for those unfamiliar.
In trading, liquidity represents clusters of stop-losses or pending orders sitting above or below key levels.
These act like magnets for price, as the market tends to gravitate toward these areas to “grab liquidity” before making its next significant move.
Current Price Action
Now, XRP has reached the supply zone we identified in our last update.
This is a critical area where sellers may take control, potentially driving the price lower. However, below the current price, there’s still a lot of liquidity that could attract XRP in the future.
What’s Next?
Here’s where things get interesting—and tricky.
- If you’re looking to short XRP, monitor how the price reacts within the supply zone. Look for structural shifts on lower timeframes (like M15 or M5) before entering.
- Make sure to apply proper risk management by moving your stop-loss to break-even once the trade moves in your favor. Why? Because price might not react to the supply zone and could continue higher.
For those looking to go long, patience is key. Wait for XRP to dip into one of the liquidity zones below, confirm a reaction on smaller timeframes, and then look for entries.
Key Takeaway
The truth is, we can never predict the market with 100% certainty. These scenarios are possibilities based on analysis, but XRP’s price might move unpredictably. That’s why keeping risk management as your top priority is critical.
What do you think? Will XRP respect the supply zone and head lower, or could it continue climbing?
Disclaimer: The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Any actions you take based on the information provided are solely at your own risk. We are not responsible for any financial losses, damages, or consequences resulting from your use of this content. Always conduct your own research and consult a qualified financial advisor before making any investment decisions.
