After Testing the M5 Supply Zone, XRP Drops to Untouched M15 Supply

In our last analysis, we anticipated that XRP could target the liquidity above, with a possible reaction from the M5 supply zone.

In our previous analysis, we highlighted the potential for XRP to reach and react to the liquidity visible above, potentially leading to a reaction from the M5 supply zone as the market recovered from the lows.

While the anticipated reaction didn’t unfold as strongly, a closer examination of the M1 timeframe reveals a risk-reward setup of approximately 1:1.5, enabling traders to move their positions to breakeven.

A Final Note: Moving to breakeven involves modifying your stop-loss order to match your entry price after the market moves in a favorable direction. This strategy allows traders to exit their trades without risk while keeping their positions open for the possibility of further gains.

In our last analysis, we mentioned the possibility of a reaction from the M5 supply zone after XRP price recovered from the lows and hit the anticipated liquidity above.

As the market trends unfold, we can observe that instead of reacting at the initial supply zone as hypothesized, XRP continued its upward trajectory, eventually encountering an untouched M15 supply zone with an imbalance—this deeper level acted as the true trigger for continuation to the downside.

However, before commencing its descent, XRP absorbed the accumulated liquidity above, effectively trapping early sellers who had opened their positions at the upper boundary of the demand zone. Subsequently, XRP followed through with its downtrend.

The lower level of demand was completely absorbed by the sellers, and the sellers couldn’t hold the price lower.

Now, XRP is leaving liquidity both above and below, which usually means we should expect a move to take liquidity on one side or the other before the price commits to a stronger direction.

The demand zone below is still valid, but its strength will depend on whether XRP manages to grab the price levels above before reaching it.

Two main scenarios could unfold from here:

If the price moves lower and reaches the demand zone without grabbing any liquidity above, the sellers might be able to push for further lower lows.

If the price manages to grab some price levels above before reaching the demand zone, it might be able to react with a bounce.

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The market's movements are inherently unpredictable, but by focusing on such technical aspects as liquidity grabs and supply-demand zones, we can aim to stay one step ahead of the market's fakeouts.

Whether you prefer trading short-term moves or positioning for the bigger picture, patience and sound risk management will be your most valuable allies in navigating the market's intricacies.

As always, stay updated with the latest market analysis to avoid getting caught off guard by sudden liquidity moves.