XRP has yet to put in a major pump after the conclusion of Ripple’s legal battle with the Securities and Exchange Commission (SEC), leading to questions as to why the altcoin is struggling. So far, XRP looks to be under a lot of selling pressure, but this could just be the preparation for the next takeoff. As crypto analyst MadWhale explains, it is times like these that the major moves tend to happen.
Market Makers Prepping XRP For A Big Move?
The sentiment around XRP has begun to shift toward the negative as the altcoin has not kept up with the likes of Bitcoin and Ethereum through the recent market surge. This underperformance has kept the cryptocurrency from its all-time high campaign as the price has continued to trend sideways.
Undeterred by this price action, crypto analyst MadWhale has mapped out what could possibly be happening to the XRP price and how market makers could be using this as an opportunity to shake out investors. In the post, the analyst explains that no market is ever just straight up or down, and it is the swings that market makers use against traders.
MadWhale explains that market makers hold the price in a narrow range or display dull sideways price movements, with breakouts in no particular direction taking place. During this time, they cause investors to lose interest and hope in the digital asset, as they make them pull out of the market.
As this happens, while investors think that the cryptocurrency has lost its momentum and will continue to crash, the market makers are using it to prime the next move. The target is often again high-leveraged traders to make them lose their positions as they flush them out.
The Move Happens When Hope Fades
While shaking out the weak hands on assets like XRP, market makers are also snapping up liquidity, which is what helps to make the next move easier. The analyst calls it “the fuel for major market moves” as it makes it cheaper for the market makers to carry out their moves. Once XRP investors are worn out and the weak hands have been taken out, this is when the main move begins.
“The market never moves in a straight painless path. Every swing trap or sideways grind has a purpose. If you understand these moves as part of the market maker’s plan to gather liquidity you can position yourself where others give up and join the move when it truly starts. Patience and pattern recognition are your sharpest weapons,” MadWhale concluded.
Featured image from Dall.E, chart from TradingView.com
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