A significant short squeeze may be on the horizon for XRP investors, potentially serving as the main catalyst for a rally that could push prices beyond the all-time high of $3.90.
Market analyst Bird made these predictions in a recent post on social media platform X (formerly Twitter), highlighting key observations from his analysis.
Key Liquidity Zones For XRPThe analysis of the altcoin’s daily chart heatmap categorizes liquidity into two distinct zones: red, signifying deep liquidity, and lighter colors indicating less liquidity.
From his observations, Bird noted that price movements away from low liquidity areas tend to occur rapidly. He explained this process: when prices approach zones with significant stop-loss clusters, they often trigger large sell-offs, wiping out long positions.
Price Targets $4.20Following these movements, the price typically rotates back toward shorts, leading to additional liquidation events. Bird pointed out that on Sunday, a number of long XRP positions were liquidated.
Now, he sees a dense liquidity pocket forming around the $4.20 mark, primarily from short XRP positions. This situation incentivizes market makers to drive prices toward this liquidity to close out those trades, rather than moving away from it.
As a result, Bird expressed confidence that the current XRP price rally is far from over. He believes that a new all-time high is imminent, as the potential for a substantial short squeeze looms.
At the time of writing, the fifth-largest cryptocurrency on the market was trading at $2, having briefly dropped to $1.84 earlier on Monday.
Featured image from DALL-E, chart from TradingView.com
