In short: Ripple's XRP has seen a 12% increase in price in the past week, surpassing the $0.6 threshold. CoinGlass data has shown an increase in long positions on leveraged exchanges. This may lead to a potential uptick in XRP's price, though it could also result in liquidations that would cause the closure of long positions, known as squeezes. Additionally, investors may be pricing in the potential for a victory in the Securities and Exchange Commission case against Ripple.
Our quick analysis:
Despite red markets across the board in the crypto world, Ripple's XRP has been a bright and shining exception. With a 12% increase over the past week and a rising price level of $0.6, investors are taking notice. But why is this happening? Let's take a look.
The SEC Question
One potential reason for the rise is the ongoing case against the Securities and Exchange Commission (SEC) of the United States. Though there's been no breakthrough in the case, there's growing speculation that investors are pricing in the potential for a win for XRP.
Recently, Judge Analisa Torres denied the SEC's request to seal documents related to a speech by former director of the agency's corporate finance division, Bill Hinman. Some are taking this as a sign that the case may be reaching its conclusion. Charles Hoskinson, founder of Cardano, even believes the case might be resolved by June.
The Leveraged Exchange Uptick
Another possible factor in XRP's price rise is the increasing number of long positions on leveraged exchanges. Analytics resource CoinGlass recently showed that the ratio of long to short positions spiked above 1 over the past day on most major crypto exchanges.
While that's good news for those going long on XRP, there's reason for concern. Leveraged positions are liquidated if the collateral covering the trade isn't enough to sustain it, which can mean force-closed positions. When that happens, long positions get sold while short positions get bought, causing something called squeezes.
If prices start moving aggressively against bullish sentiment, it can trigger a cascade of long liquidations, which ultimately adds fuel to the fire.
In conclusion: there seems to be a perfect storm brewing when it comes to XRP's price surges. Whether or not that storm ends up being a good thing or a bad thing for investors remains to be seen. But for the moment, XRP is one of the few successes in a market that's struggling.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Our quick analysis:
Despite red markets across the board in the crypto world, Ripple's XRP has been a bright and shining exception. With a 12% increase over the past week and a rising price level of $0.6, investors are taking notice. But why is this happening? Let's take a look.
The SEC Question
One potential reason for the rise is the ongoing case against the Securities and Exchange Commission (SEC) of the United States. Though there's been no breakthrough in the case, there's growing speculation that investors are pricing in the potential for a win for XRP.
Recently, Judge Analisa Torres denied the SEC's request to seal documents related to a speech by former director of the agency's corporate finance division, Bill Hinman. Some are taking this as a sign that the case may be reaching its conclusion. Charles Hoskinson, founder of Cardano, even believes the case might be resolved by June.
The Leveraged Exchange Uptick
Another possible factor in XRP's price rise is the increasing number of long positions on leveraged exchanges. Analytics resource CoinGlass recently showed that the ratio of long to short positions spiked above 1 over the past day on most major crypto exchanges.
While that's good news for those going long on XRP, there's reason for concern. Leveraged positions are liquidated if the collateral covering the trade isn't enough to sustain it, which can mean force-closed positions. When that happens, long positions get sold while short positions get bought, causing something called squeezes.
If prices start moving aggressively against bullish sentiment, it can trigger a cascade of long liquidations, which ultimately adds fuel to the fire.
In conclusion: there seems to be a perfect storm brewing when it comes to XRP's price surges. Whether or not that storm ends up being a good thing or a bad thing for investors remains to be seen. But for the moment, XRP is one of the few successes in a market that's struggling.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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