An extraordinary surge in XRP’s price is being observed, which may significantly impact the market. A 14% increase has been recorded in the past 24 hours, bringing XRP’s trading value to $2.71 and positioning it near the critical $3 resistance level.
This momentum is being attributed to rising investor interest linked to Ripple’s new RLUSD token launch. If the $3 milestone is reached, it would represent XRP’s highest value since 2018 and could potentially initiate a notable short-squeeze event.
According to data shared by the crypto analyst Ash Crypto (@Ashcryptoreal) on X, it has been reported that over $272 million worth of XRP short positions are exposed to liquidation risk if the price climbs to $3. A chart presented in the analysis highlights a buildup of leveraged short positions near this level, emphasizing its significance for traders.
When the analysis was conducted, XRP was trading at $2.677, and its rise has continued as enthusiasm surrounding the RLUSD launch grows. The introduction of this stablecoin is expected to attract new investors into the ecosystem, possibly driving XRP beyond the $3 mark.
Understanding the Concept of a Short Squeeze
A short squeeze is caused when traders who have bet against an asset by shorting it are compelled to purchase it at higher prices to cover their positions. This action often results in further upward pressure on the asset’s price.
In the case of XRP, the large volume of leveraged positions has created significant pressure on the market. If the price exceeds $3, the liquidation of these positions could potentially intensify the upward price movement.
Related Article: XRP Soars by 13% Following Ripple’s Stablecoin Announcement
The ongoing price rally is not solely driven by technical factors. The fundamentals surrounding Ripple’s RLUSD token have renewed investor confidence in XRP. This development is being viewed as a positive step for the broader Ripple ecosystem, contributing to the current bullish momentum and drawing the attention of institutional and retail investors alike.
Opportunities and Risks for XRP Traders
While the potential for a short squeeze could create opportunities for XRP holders, it has also introduced considerable risks for traders. Leveraged trading can be highly volatile—those on the losing side of this price movement are likely to face significant losses.
Could XRP’s Short Squeeze Impact the Wider Market?
The consequences of this event could extend beyond XRP, affecting the sentiment of the entire cryptocurrency market. A successful break above $3 might reignite interest in altcoins, especially those associated with Ripple’s ecosystem.
As RLUSD adoption increases in the coming days, it is expected that XRP’s upward trend could accelerate, possibly bringing it closer to its all-time high of $3.84. Some experts have even suggested that XRP might surpass Ethereum during this market cycle, with a key step toward that goal being the $3 milestone.
