XRP is facing a pivotal moment as technical analysts predict an imminent liquidity sweep that could trigger sharp price volatility, while simultaneously, a bullish Golden Cross pattern has formed on its charts. According to analyst ChartNerd, XRP is currently testing crucial Fibonacci support levels, with the 50% retracement at $2.09228 and the 61.8% level at $2.02240 being key zones to watch for confirmation of a local low. The asset is consolidating within a wedge formation, and a break below these supports could lead to further downside.
The potential liquidity sweep is driven by high leverage in the market, which often precedes rapid price movements. ChartNerd notes that significant demand waits below current levels, setting the stage for a volatile event where smaller retail positions could be liquidated, allowing larger players to capitalize. This comes after XRP recently experienced a two-sided liquidation event on Binance Futures. On January 5, a sharp price rise triggered approximately $4.4 million in short liquidations, followed by a reversal the next day that wiped out nearly $5.5 million in long positions.
Amidst this volatility, a significant bullish signal has emerged. XRP has printed a Golden Cross on its 5-day MACD, with the histogram turning positive. This same signal last appeared in July, preceding a rally to new all-time highs. The token is currently holding support near the $2.10 level, trading in a narrow range between $2.07 and $2.17 following the recent leverage reset.
On-chain and institutional data provide a mixed but supportive backdrop. Whale activity, which accounts for roughly 60% of XRP inflows to Binance, has been declining since mid-December, suggesting a cooling-off period. However, institutional interest remains robust. Spot XRP ETFs have attracted nearly $1.49 billion in inflows since their launch, despite a single-day outflow of $40.8 million on January 7. The next few hours and days are critical, as the market watches to see if XRP can hold its key support levels or if the anticipated liquidity sweep will dictate the next major price move.
