Since retesting the $2 psychological support on December 20, XRP (XRP) has consolidated between $2.40 and $2.13 over the past week, heading toward a breakout in either direction.
While the High Time Frame (HTF) structure remains bullish, one analyst explained why the altcoin should close positions above $2.30 in the near term.
The analyst says XRP has a “buy barrier” to $2.23.
CW, an anonymous cryptocurrency data analyst, said that with XRP oscillating between narrow price gaps, short-term buying barriers currently support the altcoin.
This buy wall was between $2.20 and $2.23 and further declines may occur as the altcoin is unable to sustain positions above this range. The analyst said:
“If price is supported, $XRP will rise. “If support fails, it is likely to fall into a downward trend,” he said.
Meanwhile, cryptocurrency trader Dom explained that spot buyers of Last week, spot market buyers were active on Coinbase and Bitstamp, which helped XRP maintain positions above $2.20.
Dom’s XRP price analysis. Source: X.com
However, the trader believes XRP is “not out of the woods” yet and said:
“We need to get back to $2.30 to get into safer territory.”
Related: Binance Bitcoin Reserves Reach January Levels A few months before BTC rose 90%.
XRP open interest falls 54% in 3 weeks
While XRP captured the attention of the spot market, the futures market painted a different picture. Open interest fell 54% from $4.23 billion on December 3 to $1.95 billion on December 26, according to data from CoinGlass.
XRP open interest chart. Source: Coinglass
This sharp decline over the holiday period means there is a lack of liquidity in the XRP futures market, which can be a double-edged sword. If a cryptocurrency asset reaches critical levels, its price may become more volatile than expected.
XRP 1 day chart. Source: Cointelegraph/TradingView
From a technical perspective, forming a symmetrical triangle strengthens the above argument. As can be seen on the 1-day chart, the price of A symmetrical triangle indicates equal probability between a bullish or bearish outcome.
Therefore, based on our previous analysis, a quick recovery above $2.30 could trigger a move towards a high pattern at $2.95. However, failure to hold support could lead to a new low of $1.85, which was previously seen on December 1st.
Related: Price Analysis 12/25: BTC, ETH, XRP, SOL, BNB, DOGE, ADA, AVAX, LINK, TON
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.