Bullish XRP Trading Setup, Potential for 1:2 Risk/Reward Ratio

Over the past few days, the overall cryptocurrency market has been witnessing sideways movements, including top assets such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and XRP (XRP). This prolonged sideways movement has formed a bullish trade setup in Ripple’s native token XRP, with an ideal risk-reward ratio.

XRP Bullish Trading Setup

Based on technical and price action analysis, XRP seems bullish as it is holding a crucial support level of $0.55 and forming a bullish inverted head and shoulder price action pattern. Currently, the daily chart of XRP has formed one shoulder and the head, while the other shoulder is in formation. There is a high chance that XRP will complete its second shoulder.

This level presents a strong buying opportunity with a 1:2.5 risk-reward ratio. Based on the price action pattern, XRP could rise 12% to $0.635, with an ideal stop-loss set below the 200 Exponential Moving Average (EMA) and the support level at $0.539.

Despite the recent market crash and significant price swings in other cryptocurrencies, XRP remained above this support level.

XRP Price Overview

At the time of writing, XRP is trading around $0.567 and has experienced a price increase of over 1.35% in the past 24 hours. Additionally, it has experienced a price decrease of 5% in the past 7 trading days, according to coinmarketcap.

Meanwhile, XRP trading volume has dropped by 45%, indicating lower participation from traders and investors over the past 24 hours.

High level of liquidation

According to on-chain analytics firm Coinglass, XRP’s key liquidation levels now lie around $0.553 on the downside and $0.575 on the upside. These are the key levels at which traders are placing significant high-leverage bets.

If the market sentiment turns bullish and the XRP price reaches the $0.575 level, short positions worth nearly $8.04 million will be liquidated. Conversely, if the price drops and reaches the $0.553 level, long positions worth nearly $6.9 million will be liquidated.