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- XRP presents a good buying opportunity in terms of risk and reward.
- Sentiment is bearish and traders may have to cut their losses quickly if the price trend moves in the other direction.
Ripple (XRP) has continued to trade in a short-term range. The bears have been trying to push prices below this level and seem to have succeeded at press time, but the bulls need not worry.
A gap below the range lows sets the market up for a short-term reversal, and coming up on a Monday, swing traders may want to tilt higher at the range lows.
Do the indicators point to a reversal?
Source: XRP/USDT on TradingView
The OBV on the 4-hour chart has remained stable over the past eight days. During this time, XRP has fallen by 13.5%. The OBV’s behavior was encouraging as the steady price decline was not accompanied by massive selloffs.
Instead, a fresh approach to the range lows presented a buying opportunity. Meanwhile, the MACD showed that momentum was slightly bearish, mirroring last week’s trading.
The risk/reward ratio for short-term bulls is high and invalidation is close. The most cautious bulls can wait until the New York trading session begins and the associated volatility spike stabilizes before entering the market.
Assessing the Sentiment Behind XRP
Source: Coinalyze
The funding rate was negative and open interest refused to climb. Both indicators meant that futures traders were hesitant to take a bullish position and preferred to sell or stay on the sidelines.
Source: Hyblock Capital
Read Ripple (XRP) Price Prediction for 2024-25
This bearish sentiment was reflected in the liquidation level data. The cumulative delta of liquidity levels was negative and almost reached the levels of August 30. XRP managed to rebound 4.7% from the range lows at the time.
A similar scenario is likely to play out, but traders should be cautious. Bitcoin (BTC) could decide to drop to or below the $56,000 mark, dragging the altcoin market down with it.
Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and represents the opinion of the author only.
