- XRP’s $2.20 support level remains crucial for maintaining bullish momentum.
- Liquidations and long positions suggest a predominantly bearish market sentiment.
- XRP faces a critical test at $2.00, with potential support at $1.56 below.
XRP, the digital asset associated with Ripple Labs, is currently in a consolidation phase following the recent uptrend recorded in early December. However, XRP has been able to hold essential support levels, with $2.20 serving as a key price point.
This support has been retested multiple times in December and upon every test, has bounced upward, indicating solid investor gusto and resilience. The ongoing volatility in the market suggests that the coin could either surge further upward or dislodge, in the coming days.
Market Dynamics and Liquidity Trends
As per Coinglass data, the recent market behavior of XRP reflects notable volatility, with $24.81 million in liquidations occurring within the past 24 hours. Interestingly, long positions accounted for the majority of the liquidations, totaling $17.91 million. This suggests that market sentiment is leaning bearish, despite XRP’s recent price action.
A closer look at the inflows and outflows chart reveals a shift in market activity. For most of the year, outflows dominated, signaling accumulation by long-term holders.
Speculative traders also drove attention to both inflows and price during the period from mid-November to early December as it appreciated sharply. Short positions started to build as the price peaked above $2.50, and outflows surged once more as traders took profits.
Price Momentum and Moving Averages
Currently, XRP is trading around $2.30, indicating a consolidation phase following its rally. The price momentum appears to be slowing, with smaller daily candles reflecting reduced volatility. Nevertheless, the longer-term outlook remains bullish, supported by key moving averages.
The 200-day simple moving average (SMA) near $1.56 provides solid long-term support, while the 100-day SMA at $1.05 serves as an important mid-term level. Additionally, the 50-day SMA around $0.79 remains a critical support during initial rallies. These support levels offer a buffer against further downside risk, although a break below $2.00 could signal a deeper retracement.
Key Support and Resistance Levels
At the moment, XRP is looking to surge past minor resistance at $2.30, a level that it has failed to breach recently. However, if XRP continues to rise above $2.50 with strong volume, it would be able to shoot for the $3.00 mark which would be a psychological resistance to break through.
On the downside, $2.00 remains a crucial support level, with the 200-day SMA at $1.56 acting as the next major defense against a bearish move. Should the price dip below $2.00, it may test $1.56, further indicating the strength of the support zones.
Price Prediction for December 20
For December 20, two potential scenarios emerge for XRP. A bullish picture would be seeing XRP hit $2.50, volume confirming the move and the price rising to $3.00.
But if the price does not break above $2.50 and the volume does not increase either, a pullback to $2.00 or lower might happen. A dip below $2.00 has the price moving toward $1.56 as the next support level in a bearish turn. Consequently, XRP traders should focus on the price keeping support at $2.00 so that it establishes the short-term direction.