XRP short squeeze has just erased days of losses for the coin as it was facing strong pressure over the past few days and weeks thanks to the recent SEC lawsuit and the delisting from exchanges, as reported in our Ripple news.
The cryptocurrency is trying to gain some momentum and the bulls were stepping up and propelling the token higher overnight after the break above the key technical pattern. Where will the token trend next in the mid-term will depend largely on whether or not the bulls are able to sustain the momentum. With the fundamental strength growing weaker every day, there’s a strong chance that XRP’s price will consciously slide lower in the next few weeks. The drying volume and limited access for US residents could hamper its outlook.
XRP was one of the worst-performing assets over the course of the recent bull run and it saw a parabolic rally which sent the coin from the lows of $0.25 to highs of $0.90 the crypto started a drop which is still ongoing. The rally timing was interesting as it coincided with the recent SPARK airdrop and resulted in XRP seeing a parabolic move in years. After everything settles, the SEC filed a lawsuit against Ripple and accused them of selling unregistered security offerings among other things.
At the time of writing, XRP is trading up by 10% with a current price of $0.24 which marks a massive surge from the days of losses that lead to weekly lows of $0.17 set a few days ago. The cryptocurrency was holding steady above the $0.20 support but remains unclear where the support is coming from. Apart from Kraken, almost every major US exchange announced plans to delist the token later this month and this will force the holders to sell coins while others want to hold hoping that Ripple will win the lawsuit with the SEC.
The XRP short squeeze came about because of a technical breakout. Funding rates for short positions across margin trading platforms were extreme as well which could explain the rally. One analyst noted that it was pushing against the symmetrical triangle pattern before the move which could spark a flurry of buying pressure from the swing traders:
“XRP symmetrical triangle, could really break either direction, no real bias here. Either direction should give a nice little pop. Money to be made here.”
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