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.
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 favorable 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.
