XRP Price News: Bear Trap Sets Stage for Massive Squeeze – $3 Next?

This token’s price action has been stalled for days as it has been consolidating for a while following a strong rally that pushed it near its all-time high.

XRP is performing in the opposite direction of the entire market, which makes this technical phenomenon even more relevant as it has the capacity to move against the overall current.

Just a few hours ago, Ripple announced that its native stablecoin – Ripple USD (RLUSD) – was listed on Bitget – an important centralized exchange (CEXs).

This is the latest in a wave of listings that aim to make the project’s new stable asset available to a larger pool of investors.

RLUSD Could be Critical to XRP’s Future

Ripple USD plays a critical role in helping the company fulfill its vision of becoming the preferred cross-border payment alternative for the world.

RLUSD’s market cap has expanded from $50 to $310 million in around five months. The Ripple network is one of the cheapest alternatives to send remittances in the crypto world.

If RLUSD gains traction and starts to increase its share in the stablecoin market, this would result in higher demand for XRP as the utility token required to settle transactions via the Ripple blockchain.

The company has also been pushing forward its enterprise payments solutions. These initiatives aim to expand the network’s reach by attracting corporate treasuries to the Ripple ecosystem to facilitate cross-border payments.

These ambitious plans have a clear goal and favor a bullish long-term outlook for the project based on how the company advances its initiatives.

Open interest in XRP futures has been rising lately, moving from around $3.6 billion to $4.76 billion since May 7.

Traders seem to be positioning for a big move that has not yet occurred, as XRP has been trading in a relatively tight range for a few weeks now.

XRP Could Rise to $2.5 if This Support Level Holds

The hourly price chart shows key areas to watch for XRP down the road. The first is the consolidation rectangle that formed as a result of the token’s latest stalled price action.

The lower bound of this range was broken yesterday as we reported yesterday. However, a confirmed bearish breakout would require a retest.

In XRP’s case, this retest did not happen as the market pulled a bear trap, meaning that the price climbed back into the range it broke out of.

Today’s price action has found support at the lower bound of the consolidation rectangle at $2.2680 and, as long as that level holds, the token’s outlook has now shifted to bullish.

Bear traps are a way for the market to tap into some locked liquidity by pushing the price below a key zone and then reversing the trend to trap bears and force them to buy the asset to cover their open short positions.

This typically results in a strong rally in the near term and this could be the case for XRP. In this lower time frame, XRP has bounced every time the $2.2680 is touched. Hence, the market is defending that spot and may be preparing a strong move to $2.5 first and maybe higher.

Significant liquidity lies above $2.3 and $2.5 as most bearish activity has occurred at these levels.

A long position at this point offers an interesting risk-reward ratio of 3 with the stop loss set below at around $2.25 and a take-profit target at $2.5 (at first).