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Highlights
- The crypto market saw $657 million in liquidations, with XRP dropping 6.49% and losing $140 million in Open Interest.
- XRP's price revisited a key support level at $2.139, which could provide stable support and lead to a bottom formation.
- Macroeconomic factors around Trump Tariffs continues to rattle the markets.
The crypto market saw liquidations of $657 million in the past 24 hours, as Bitcoin (BTC), Ethereum (ETH), and XRP prices dropped by 3.89%, 4.20%, and 6.49%, respectively. Bitcoin’s rejection at a key technical level exacerbated the sell-off. Due to XRP’s high correlation with BTC, it faced a similar drop today.
XRP Nosedives As OI drops to $140 Million
As a result of today’s crash, the XRP Open Interest (OI) has dropped $140 million in the past 17 hours, according to VeloData. This flush in OI indicates that overleveraged positions were culled from the market, creating a favourable buying opportunity.
A 7% drop in the past 12 hours caused $23 million in XRP long liquidations. This sudden nosedive ended the 18-day range tightening that XRP underwent, creating lower highs and lower lows. Connecting the trend lines with swing points reveals a falling wedge pattern. Generally, falling wedges offer a bullish breakout opportunity, but the recent crash has done the opposite due to Bitcoin’s crash.
Regardless, the nosedive in crypto markets has caused XRP price to revisit a key support level at $2.139. Considering that this support is the highest traded volume level on May 4, which led to an 18% rally, a retest of this level is likely to provide a stable support level. Absorption of selling pressure in this area could lead to a bottom formation here.
Will XRP price crash halt here?
From a technical standpoint, the chances are in favor of bulls. However, Bitcoin’s outlook remains bearish as noted by CoinGape’s previous coverage. Hence, investors should watch for a BTC recovery rally to confirm a potential bottom formation for XRP. A failure to hold above $105K could lead to a steep correction for BTC, including a revisit of $ 100,000.
In such a case, the high correlation with BTC will cause XRP price to follow Bitcoin’s footsteps and crash lower. Investors can expect a retest of the $2 psychological level under these bearish conditions.
The macroeconomic factors keep playing a crucial impact on crypto market. One key such factor is Trump tariffs and US president’s uncertain moves. Yesterday, the market went bullish following the US international trade affairs court overrules the tariffs. But, as reported by Coingape, soon after, the Federal appeals court reinstated the Trump tariffs. This was a huge shock for the crypto markets, Bitcoin fell to $105k while XRP price also took a hit.
Markets are expecting a very volatile weekend as macroeconomic factors continue to adversely impact crypto while the fundamentals look better than ever.
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