- XRP reacted strongly to a supply zone but surged to $3.40, grabbing liquidity above
- On the m5 chart, a bearish trend persists, with liquidity above and below the current supply zone
- A small demand zone presents a risky but potentially rewarding buying opportunity for XRP bulls
In yesterday’s analysis, we discussed the potential reaction of XRP to a supply zone, with liquidity looming above.
So, what actually happened? XRP initially reacted to the supply zone, but instead of heading lower, it surged to $3.40, aggressively grabbing the liquidity above.
If you sold at that supply level, I hope you protected your position by moving your stop to break-even!
Now, let’s break down the current scenario and explore possible outcomes for XRP traders.
A Bearish m5 Outlook and Key Zones
On the 5 minute chart, XRP is showing a bearish trend. Here’s what stands out:
- Liquidity above and below the supply zone: This zone could generate a significant bearish reaction. However, liquidity above the supply zone still poses a threat, meaning any short positions should be approached with caution.
- A Promising Demand Zone for Buyers: On the flip side, there’s a small but intriguing demand zone that could act as a springboard for a bullish move. While risky due to its size, this zone has potential.
What’s Next for XRP?
Here’s the reality: the market doesn’t owe us anything. XRP could follow the outlined scenarios, or it could surprise us with an entirely different move. That’s the beauty—and the challenge—of trading.
If you’re looking to trade:
- Short positions: Watch for a clean reaction at the supply zone, but protect your capital by managing risk appropriately.
- Long positions: Keep an eye on the demand zone for signs of strength, but remember that it’s a high-risk play due to its small size.
Conclusion
Trading XRP right now requires a mix of patience and adaptability. The supply zone could bring a bearish reaction, but the liquidity above keeps things unpredictable. Similarly, the demand zone offers a possible buying opportunity, but it’s not without its risks.
Remember: no analysis is 100% certain. The market moves as it pleases, and all we can do is prepare for different scenarios. Stay vigilant, manage your risk, and let the charts guide you.
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.
