Analyst: XRP is Preparing for a Short-Term Price Rise

According to the renowned crypto analyst CryptoInsightUK, there are increasing technical signals suggesting that XRP may be on the verge of a short term squeeze. In a post on X, the analyst highlighted important on-chain data and derivation products, painting a picture of dense liquidity stacked against the current price, rising open interest, and a structure resembling previous conditions before squeezes. Is the short selling of XRP about to take place? "Hourly liquidity is very interesting," CryptoInsightUK wrote, emphasizing what he describes as "SUPER liquidity above us," while adding that in his view, "this is inevitable, whether sooner or later." Accompanying images shared by the analyst show that the cluster of low liquidity is around $1.90, while the upper zone - where potential short-selling squeeze could be triggered - is concentrated around $2.40. The implication here is very clear: short-selling orders are susceptible to a range of forced liquidation orders if the price starts to accelerate.

Analysis based on data from @velo_xyz shows that open interest has been steadily increasing since the unexplained spike on June 24. Notably, during this period, the premium has remained at a very large negative level and the funding rate has fluctuated between positive and negative. "For me, this indicates that there has been a net addition of short positions to open interest on $XRP," the analyst wrote, implying that a crowded short position could now be structurally exposed. Combining this with TradingDiff's liquidity heatmap, CryptoInsightUK infers that "at some point, we are looking for a short sale of XRP". Although the timing is still uncertain, the combination of increasing open interest, negative premiums, and dense liquidity above indicates an increasing asymmetry of risk for short sellers.

However, the analyst added an important note of caution. "Both ETH and XRP daily have some lower liquidity than we do," he said, acknowledging the possibility of spoofing or liquidity being swept down before any strong bullish move. "As you know, it can leave some liquidity when some people win their trades. BUT, we cannot rule this out."

A final observation focuses on the changing liquidity context of Ethereum, which may have broader implications for the entire market. CryptoInsightUK has written that "Something has changed on ETH." "If we look at the liquidity above, we can see that red has turned to yellow." He explains this change as a signal that may indicate that short positions are being closed or new long positions are being built below the current price, thereby visually reducing the intensity of liquidity above.

Whether XRP can reach a liquidity level of $2.40 remains to be seen, but the fuse may have already been lit. At the time of reporting, XRP was trading at $2.18.