XRP Value Drops Amid Doubts, Yet Positive Sentiment Persists
The Declining Value of XRP: Is It Still Worth Holding?
The cryptocurrency XRP has been experiencing some difficulties lately. Some major investors have begun to question its long-term potential. This has resulted in the number of addresses holding between 100 million and 1 billion XRP dropping between January 24 and 25.
Problems in the XRP Realm
This decline suggests that some “whales” (large investors) no longer have confidence in XRP and have decided to liquidate their assets. The decision to leave the XRP market could be related to its price performance. At the time of reporting, the price of XRP was at $0.50, indicating that it has lost 19.18% of its value in the last 30 days.
However, XRP’s problems did not just start a few weeks ago. Last year, XRP almost jumped to $1 after Ripple scored a victory against the SEC. The recent decline means that the token has since lost almost 50% of its value.
Criticism and Optimism
Despite the price drop, the sentiment around the cryptocurrency remained positive. This was determined by evaluating the Weighted Sentiment metric. At the time of reporting, the Weighted Sentiment had risen to 0.71. This value measures the unique social volume associated with a project. A positive value indicates predominantly optimistic comments.
What’s Next for XRP?
However, it is important to note that the bullish sentiment of participants is not a guarantee that the price of XRP will rise again soon. More than just the market’s perception would be required. Therefore, the liquidation levels and the Cumulative Liquidation Levels Delta (CLLD) were reviewed. Liquidation levels are estimated points that could trigger the automatic closure of existing positions.
According to data from Hyblock Capital, there were several liquidity clusters from $0.51. So, if traders were to open high-leverage long positions, they could easily be liquidated. However, shorts targeting between $0.48 and $0.49 would have a low liquidation risk.
The CLLD has meanwhile jumped in the negative direction. In this case, shorts that are late to take advantage of the price decline could be liquidated. Therefore, while XRP could fall to as low as $0.48, it is not expected to take long for the price to recover.
Sources: Hyblock Capital, Santiment