The trend could lead to some traders closing their short positions manually to take a small loss. When these traders close their shorts, they are required to buy back XRP, which might bolster the price higher. Meanwhile, the second scenario is where others experience robust liquidations.
If the price reaches their liquidation level, the crypto exchange closes its positions. Thus, these investors will buy XRP at a much higher price, forcing them to wipe out their positions. However, when this kicks off, the possibility of it creating a chain reaction becomes high.
Currently, the chart shows that liquidity above appears large, implying it could create a massive squeeze toward new highs. However, this is likely if momentum starts and those levels start to get taken out. Furthermore, the market appears to be just waiting for the catalyst to turn things around, and when that happens, these moves tend to happen very fast.
Activity Rising Across The NetworkThe recent figure represents a sharp increase from recent baselines on the monthly timeframe. As seen on the chart, this marks a more than 40% rise from early February, over 25% from early January, and more than double the 2025 slowdown lows.
