XRP Price News: Whale Transactions Suggest Local Bottom at $1.20

XRP (XRP) slightly recovered after hitting $1.20 and has booked a 6% gain in the past 7 days as the crypto market seems to be getting close to finding a local bottom.

The native asset of the XRP Ledger is now trading at $1.50 after briefly surging to $1.65 during the weekend.

The price action respected a structural resistance at this level, suggesting that selling pressure is still strong.

This could set the stage for a massive short squeeze at a point when even large holders are dumping the token, following its latest dip.

Whales Capitulated at $1.20

On-chain data from Santiment indicates that whale transactions exceeding $5 million spiked in late January as the price dipped to $1.20.

Whale Transaction Count and Stablecoin Inflows – Source: Santiment

This metric reached its second-highest level in 12 months, indicating strong activity from deep-pocketed investors.

At the same time, the percentage of stablecoins held by these large wallets hit a new record, meaning that investors dumped XRP and resorted to dollar-pegged assets at a point when the market was tanking.

As the chart shows, the price has started to recover since the beginning of February.

Extremely negative sentiment readings tend to be a contrarian signal during bearish cycles. Usually, when the market is this pessimistic, the “smart money” tends to step in to accumulate assets, especially when the selling pressure starts to ease.

The Fear and Greed Index confirms that the market is in capitulation mode, as this sentiment gauge recently dropped to its lowest level on record at 5.

As a result, the amount of outstanding short positions is probably high enough to catalyze a massive short squeeze if the price manages to rise past the $1.65 resistance.

XRP Hits Sell Wall at $1.65

Looking at the daily chart, we can see that trading volumes spiked once XRP tried to move above this level.

XRP/USD Daily Chart – Source: TradingView

This confirms its relevance to market participants and makes it the key level to watch in case bulls take another try.

The Relative Strength Index (RSI) just sent an early buy signal upon rising above the 14-day moving average. If this momentum oscillator climbs above 60, it would further confirm a potential trend reversal in the making.

Buy Signals Pile Up in the 4H Chart – Trend Reversal Coming?

Heading to the 4-hour chart, we are starting to get buy signals at these levels following a flood of 6 consecutive “sell” prompts.

XRP/USD 4H Chart – Source: TradingView

This can also be an early indication that the price action is ready to reverse course. The price has been progressively moving to higher ground since February 5, meaning that buying pressure is increasing.

Short liquidations spiked during the weekend again to a level similar to the one seen when XRP hit $1.20.

If these relatively shy moves have already managed to flush a big number of bears out of their shorts, imagine what could happen if we climb past $1.65 and reverse the trend.

XRP could rapidly spike to $2 and possibly higher if bears are caught off guard.