XRP Price Enters Danger Zone after 14% Crash: Here’s What to Expect

XRP price tumbled 14% on June 7, reaching a 50-day low of $0.45, bull traders backing the Ripple-issued coin appears to have mounted new leveraged LONG positions to avert further downside. 

XRP Price Tumbled 5% Amid Crypto Market Correction

After an optimistic start to the month, the global crypto market abruptly entered a consolidation phase on June 7. The pull-back came as a result of disappointing figures observed on the latest XRP investors report released by the US Bureau of Labor Statistics on Friday.

The surge in US Jobs now means that a rate cut is unlikely when the Fed meets for the next FOMC on June 12. Mirroring the broader crypto markets, XRP investors reaction to the disappointing NFP data was negative.

After a blistering 5% surge at start to the week, XRP price has raced to a weekly timeframe peak of $0.53 by June 5. However, all of that growth was erase after the NFP report hit the news reels on Friday, June 7.

As depicted in the red-shaded area of chart above, XRP experienced a major 14% crash, as it fell from $0.53 to a 50-day low of $0.45.

While XRP price has reclaimed the $0.50 territory at the time of writing on June 7, the dominant market sentiment still appears firmly bearish.

XRP Bull Traders Mount $13M Support Buy-Wall

Following the NFP report, investors began to make frantic sell-offs in the spot markets, however market data shows that most of the damage that led to the 14% crash was triggered by massive liquidations in the price speculation markets.

Coinglass’ Liquidations Chart below tracks the value of futures active contracts liquidated or closed during a given period. Higher long-liquidation occurs when there’s a rapid price downsizing in the spot markets and vice versa.

As seen in the chart above, XRP derivatives traders suffered $6.9 million liquidations on June 7. LONG traders took the worst hit, with over $6.6 million LONG positions recorded, against the $231,840 SHORTs contracts closed.

This shows how the 14% XRP price downside observed on June 7, may have been exacerbated by the LONG squeeze triggered in the derivatives markets.

However, as the dust settles, we have seen efforts by XRP bulls to mount new covering positions to halt the price dip.

XRP Price Forecast: Bulls Mount $14M Support

XRP price has reclaimed the $0.50 level at the time of writing on Saturday June 8, as bulls attempt to stage a quick recovery from Friday’s losses. While the bears are still dominant, XRP bull traders have now mounted new long-positions worth $13 million to keep prices above $0.45.

As seen below, bulls have listed 13.85 million cumulative LONG positions around the current prices. With over $25 million worth of SHORT positions in play, bears are evidently in control of the short-term market momentum.

Considering that majority of these positions could be liquidated if  prices fall below the $0.45 level, it shows strong intent from XRP bulls to fight back.

If that $13.9 million support holds firmly, XRP traders can anticipate a safe consolidation within the $0.47 to $0.51 channel in the days ahead.