XRP Suddenly Sparks 35% In Half An Hour After A Strong Correction

XRP suddenly sparks a 35% increase in about half an hour, showing strong signs of a correction right after Coinbase and Bittrex decided to stop XRP Trading on their platforms. In today’s Ripple news, we take a closer look at the  XRP price analysis.

The main catalyst that made XPR suddenly sparks seems to be a short squeeze. According to the data from byBt, $96 million worth of XRP futures contracts were liquidated over the past 12 hours. Coinbase suspended trading XRP on its platform after many other exchanges decided to stop trading services for XRP as well like Bitstamp. Paul Grewal who was the chief legal officer at Coinbase said:

 “In light of the SEC’s lawsuit against Ripple Labs, Inc, we have made the decision to suspend the XRP trading pairs on our platform… The trading suspension will not affect customers’ access to XRP wallets which will remain available for deposit and withdraw functionality after the trading suspension.”

Coinbase suspended XRP trading which established a precedent for the crypto exchange market as it is expected to have major implications for the cryptocurrency. with the risk of more exchange delistings on suspension, the market started to sell and short XRP massively. However, when an asset gets shorted, the probability of the short squeeze increases. A short squeeze happens when short-sellers purchase capital to sell an asset with leverage and then are forced to buy back the positions if the price o the asset increases. The $96 million XRP futures liquidation in 12 hours clearly shows that a short squeeze happened and some technical analysts predicted a move like this with one crypto trader saying:

 “Down double digit % pts in a day, entire feed short say it’s going to 0, price dumped into HTF support, easy punt. SEC crushing XRP would be bad for the space as a whole IMO but for now it’s risk specific to Ripple. That said, I don’t care play the chart and sentiment.”

In the near-term, XRP faces strong resistance levels of $0.24 and $0.26 as the momentum of the short squeeze slows down but some wait for the strong signs of correction. Analysts expect that the US SEC lawsuit against Ripple will apply even more pressure on other tokens, as Alex Kruger said:

 “Exchanges delisting $XRP following the SEC lawsuit is worrisome for many other tokens. The big questions now are ‘who comes next?’ and ‘how fast will the SEC move?.’”