XRP Investors May Want to Lock in Profits as Risk Metrics Hint at Potential Turbulence Ahead

XRP investors have enjoyed significant gains lately, as the token’s impressive rally continues. However, looming risk metrics are hinting at potential turbulence ahead. With over 90% of bearish liquidation levels exhausted and normalized risk hitting extreme levels, could this be the perfect moment to lock in profits before the momentum shifts?

Let’s take a closer look at the XRP market to uncover the possibilities.

XRP investors have enjoyed significant gains lately following the token’s impressive rally. However, looming risk metrics seemed to hint at potential turbulence ahead. With over 90% of bearish liquidation levels exhausted and normalized risk hitting extreme levels, could this be the perfect moment to lock in profits before the momentum shifts?

Alphractal’s XRP liquidation heatmaps offer a granular perspective on the token’s price movements and market depth. These heatmaps visualize the distribution of open interest in XRP perpetual contracts, providing insight into the price ranges where traders are positioned.

The three-month heatmap reveals dense clusters of liquidations in the $3.00-$3.50 range, indicating that the majority of short positions have been cleared, contributing to the recent rally.

However, below $2.50, liquidity thins considerably, suggesting limited support if the price drops on the charts.

Delving deeper, the one-month heatmap reinforces this view, revealing a near-total exhaustion of bearish liquidation levels and a buildup of long positions in the $3.25-$3.50 range.

This raises the risk of a long squeeze if XRP loses momentum, potentially triggering a sharp sell-off.

Moreover, the imbalance between plateauing short liquidations and rising long liquidations is a sign of a market that is skewed towards bullish sentiment.

While XRP’s rally has largely been fueled by short squeezes, the lack of bearish liquidity and concentration of long positions suggest that the stage may be set for heightened volatility.

XRP’s Normalized Risk Metric and Sharpe Ratio, press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time press time