The price of Ripple (XRP) has increased by 25% in the past 24 hours after Gary Gensler announced that he will resign as Chairman of the United States Securities and Exchange Commission (SEC) on January 20, 2025.
This development has brought relief to the famous "XRP Army", who have had to face price volatility suppressed by the SEC under Gensler's leadership, which has relentlessly filed against Ripple. But that's not all that has happened.
Bearish Ripple traders face significant liquidations after Gensler's announcement
Gensler's announcement appears to be a positive development for the broader cryptocurrency market. However, XRP holders seem to be the biggest beneficiaries. This is particularly significant given the unresolved legal issues between Ripple and the SEC that have dragged on throughout the SEC Chairman's tenure.
As a result, it is unsurprising that the XRP price has surged strongly and outperformed any other top 10 cryptocurrency. Furthermore, this development has triggered liquidations totaling $26.11 million in the past 24 hours.
Liquidation occurs when a trader fails to meet the margin requirements for a leveraged position. This forces the exchange to sell their assets to prevent further losses. In the case of XRP, the liquidations have primarily led to a short squeeze.
A short squeeze occurs when a large number of short positions (traders betting on a price decline) are forced to close, driving the price higher as they rush to buy back the asset.
At the time of reporting, XRP is trading at $1.40 and has a market capitalization of $80.64 billion. With Gensler's near-departure, cryptocurrency lawyer John Deaton believes the XRP price could go higher, and the market capitalization could reach $100 billion.
"XRP will soon reach a $100 billion market cap. The times are changing," Deaton wrote on X.
Meanwhile, data from CryptoQuant shows that the total amount of XRP being deposited into exchanges has decreased significantly. Typically, a low value indicates increased selling pressure in the spot market, as it suggests that more assets are being sold, which could push the price lower.
However, due to the low value, XRP holders are refusing to sell. If this persists, the value of the Token could rise above $1.40.
XRP Price Prediction: Within Reach of $2?
According to the 4-hour chart, XRP has been trading in a range from $1.04 to $1.17 since November 18. This sideways movement has led to the formation of a bullish flag - a chart pattern that suggests potential upside.
The bullish flag begins with a strong price increase, forming the flag pole, driven by significant buying pressure overcoming sellers. This is followed by a consolidation phase, where the price adjusts slightly and moves within parallel resistance levels, creating the flag structure.
Yesterday, XRP broke out of this pattern, signaling that the buying side has taken control of the market. If this momentum continues, the XRP price could surpass $1.50, potentially reaching the $2 level.
However, this bullish scenario is dependent on market behavior. If holders decide to take profits, selling pressure could push the XRP price below $1, wiping out recent gains.
