Ripple’s native cryptocurrency, XRP, might be on the verge of a significant squeeze against Bitcoin (BTC). The XRP/BTC pair currently trades at 0.00000968 BTC, reflecting a 34.5% decline since the start of the year. However, it has rebounded with a notable 27% gain since June, sparking interest in a potential short-term price squeeze.
Squeeze Alert: Could History Repeat Itself?
Crypto analyst Crypto Michael highlighted in a recent X post that XRP might be following a historical squeeze pattern. In August, XRP experienced a brief squeeze after Judge Analisa Torres delivered her final judgment in the SEC vs. Ripple case.
A squeeze occurs when a sharp price increase happens due to abundant short positions. Given the current market conditions and XRP’s performance, a similar scenario could be on the horizon. However, last year’s bullish momentum following legal victories was short-lived, raising questions about whether this potential squeeze will have lasting effects.
XRP Ledger Struggles: Market Cap Hits a Low
While the price squeeze draws attention, the XRP Ledger ecosystem faces its own challenges. Artur Kirjakulov, co-founder of XPMarket, revealed that the ecosystem’s market cap has hit its lowest point since January 2022. This decline suggests that developers and projects are shifting away from XRP to other blockchain platforms, potentially affecting innovation and investment within the XRP ecosystem.
As trends like DeFi and meme coins gain traction, the XRP Ledger risks being left behind without sufficient developer interest to drive growth and adapt to the latest trends.
Current Market Standing
Despite these setbacks, XRP remains strong, holding the 7th spot in terms of market capitalization at $29.6 billion. It has formed higher lows within an ascending channel. Signalling continued optimism and buying interest. However, it remains below crucial exponential moving averages (50, 100, and 200), indicating that it still needs more momentum to break through resistance levels.
If XRP stays within its ascending channel, it could aim to reclaim $0.55 and potentially test higher resistances at $0.60. However, should it fall below its support levels, XRP could drop back to earlier lows near $0.50.
What Lies Ahead for XRP?
The future of XRP hinges on its ability to maintain its current momentum and capitalize on new opportunities in the blockchain space. With market dynamics constantly shifting and challenges in the XRP Ledger ecosystem, whether XRP can sustain a long-term bullish trend or face continued volatility remains to be seen.
Trade on BITFLEX now!