- A rare 5-day MACD Golden Cross has appeared on the XRP price chart for the first time since July.
- Analysts are watching the $2.00 to $2.15 support zone to see if buyers can prevent a deeper drop.
- Long-term price targets reach as high as $8.00 by the end of 2026 if market adoption continues.
XRP is currently standing at a crossroads after a volatile start to the year.
The token recently showed signs of strength by reclaiming the $2.10 level. Traders are now watching a rare technical pattern that often comes before a major move.
This specific pattern appeared on the 5-day chart as a “Golden Cross,” and history shows that the last time this occurred, the asset rallied to a new high.
XRP’s Technical Signals and the Golden Cross
The recent appearance of the Golden Cross on the 5-day MACD has caught the eye of many analysts.
This signal indicates that upward energy is building behind the scenes. Along with this cross, the histogram has flipped from red to green.
This change typically marks a change in market sentiment from selling to buying.
XRP forms a golden cross on the daily charts | source: TradingView
Trading volume for XRP has also been high at roughly $3.86 billion daily. This level of activity shows that the market is very engaged. Despite the positive signal, the price must hold above $2.00 to remain healthy.
If the price falls below this line, the bullish outlook might fail. Because of this, analysts believe that clearing the $2.27 resistance is the next major step for a rally.
Why Ripple XRP Liquidity is Reaching New Lows
A major driver for the current price action is the supply of tokens on exchanges. Exchange balances for XRP have dropped to a seven-year low.
This means that when fewer tokens are available for sale, even a small increase in demand can push prices higher.
This thinning liquidity helped the asset reach $2.41 earlier this year.
XRP has been mostly positive in the ETF market inflows | source: Soso Value
Inflows into spot XRP ETFs also contributed to the recent rise. These funds saw nearly $2 billion in new capital before recording their first small outflow.
Even with this recent exit, the Market Value to Realised Value (MVRV) ratio is still low at 1.04. This number tells us that the average holder is only in a small amount of profit.
Historically speaking, high MVRV ratios usually mean the market is overheated. Since the current ratio is nowhere near the peak levels seen in previous cycles, there is plenty of room for growth.
Put simply, the current cycle is still in its early stages, and many holders are choosing to keep their tokens rather than sell for a small gain.
The Battle of Liquidation Heatmaps
Traders are currently locked in a leverage battle. The liquidation heatmap now shows two major areas where big price moves could happen, and one area sits between $2.40 and $2.60.
This zone is filled with “short” positions. Which means that if the price reaches this level, those traders will be forced to buy back their tokens. This could trigger a “short squeeze” that sends the price flying toward $3.00.
The other area is the “Wall of Pain” between $2.00 and $2.15.
XRP liquidation heatmap shows short squeeze versus wall of pain | source: Coinglass
This zone contains many “long” positions from retail traders who bought during the recent rally. If XRP slips into this region, it could trigger a flash crash.
This would happen as over-leveraged traders are forced to sell.
Breaking the $3 Psychological Barrier
Breaking the $3.00 mark is the big goal for bulls this year. For the first time since October, holders’ sentiment has moved into positive territory.
This means that people are becoming more optimistic about the future of the Ripple ecosystem.
If buyers defend the $2.00 support successfully, the path to $3.26 opens up.
Source: https://www.livebitcoinnews.com/could-xrp-price-drop-to-2-before-the-next-rally/
