- XRP has recently taken out key liquidity above and below, reacting to a small demand zone
- Current price action shows XRP accumulating liquidity above while sitting near a demand zone
- The excessive liquidity below the current demand makes this an area to watch closely but not an ideal buy
Yesterday, we noted how XRP was accumulating liquidity both above and below.
On the M30 chart, the liquidity above was closer, while the liquidity below was more distant. What happened next?
The price climbed to grab the liquidity above but quickly turned downward. Initially, it seemed to react, but it only ended up creating liquidity below, which it took out shortly after.
Following that, XRP reacted to a small demand zone, rallying upwards. It came tantalizingly close to the supply level where we had aimed to sell and then delivered a solid bearish reaction.
What’s Happening Now?
At the moment, XRP is slowly descending, forming a trail of liquidity above. This setup could be intriguing—if the price first dips into the demand zone below without grabbing the liquidity above, we might see an explosive upward move.
However, here’s the catch: despite XRP currently sitting in this demand zone, it’s not an ideal buy for me.
Why? The excessive liquidity resting just below this demand zone makes it too risky. It’s better to wait for the market to show clearer intentions before making a move.
Understanding Demand and Liquidity
For those new to these terms:
- Demand Zone: A price area where buying pressure is expected to outweigh selling pressure, often leading to upward movements.
- Liquidity: In trading, this refers to price levels with clusters of stop-losses or pending orders that the market often targets.
What to Watch Next
Keep an eye on the liquidity above and below. If the price clears the liquidity below first, the demand zone could act as a strong launchpad. However, caution is key here. Market conditions can shift quickly, especially with XRP’s current volatility.
Final Thoughts
As always, patience pays off in crypto trading. While the setup on XRP looks promising, risk management should remain a priority. And if you’re looking to trade XRP, check out platforms like Bybit or Weex for seamless trading experiences.
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.
