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Ripple and Cardano Price Facing Short Squeezes — XRP and ADA Ready To Spike?

Last Updated March 11, 2024 3:04 PM
Nikola Lazic
Last Updated March 11, 2024 3:04 PM
By Nikola Lazic
Verified by Peter Henn

Key Takeaways

  • ADA and XRP poised for potential short squeezes.
  • Significant liquidity pools suggest upward price potential.
  • Market volatility requires cautious investment consideration.

This week, there could be some significant price movements in the cryptocurrency market, notably through a short squeeze. According to CoinGlass  data, Cardano (ADA) and Ripple (XRP) are two cryptocurrencies with notable short-squeeze potential. 

Short squeezes happen when the rapid closure of short positions propels prices higher due to forced buying. With this in mind, will we see ADA and XRP making new price spikes? If so, where could they reach? 

ADA Analysis 

With its substantial upside liquidity pools and a recent sharp price drop to $0.55, Cardano has seen a build-up of short positions. After it last downward spike, ADA started moving sideways below $0.75. 

Coinglass Data
ADA Liquidations | Credit: CoinGlass

The liquidation map above shows a cluster formed with over nine million positions opened above this range. Should the price continue increasing, it could trigger a short squeeze, turning all those who have opened short positions into buyers with $555.86 million in shorts opened in the last 24 hours. 

Daily chart
ADA price chart

On March 4, ADA reached a higher high of $0.80 compared to its previous one of $0.68. It showed signs of struggle but is still on an upward trajectory on the daily chart. Its next significant resistance zone would be around $1, where a horizontal level is located, serving as support from March 2021 until April 2022. 

If Cardano’s price continues moving up and triggers a short squeeze, it would likely continue to around $1. This would represent another 40% increase from the current level. 

XRP Analysis 

As in the case of ADA, the price of XRP also moved sideways since its last downward spike to $0.50 on March 5. It formed a range between $0.60 and $0.63 above with a liquidation leverage of 19 million positions on Binance perpetual contracts. 

CoinGlass data
XRP Liquidations | Credit: CoinGlass

In the last 24 hours, $1.14 billion worth of short positions have been opened for XRP, according to CoinGlass  data. If Ripple’s whales start buying, its price could easily cause a larger number of these positions to liquidate. 

XRP started its last major uptrend on January 31 after dipping below $0.50 and retesting its significant ascending support. On March 4, it reached a high of $0.67 but quickly dropped to $0.53 the next day, a decrease of 20%. 

Daily chart
XRP price chart

However, this was most likely due to a long squeeze and was exaggerated. A recovery followed, causing the price to stabilize at around $0.62, where it is currently traded. XRP formed a symmetrical triangle since its last peak. This appears to be its fourth wave of a five-wave count. 

If this is the case, a new uptrend should start upon completion, resulting in one more high. Its likely target would be slightly above $0.70, an increase of 15% from current levels. 

Disclaimers

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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