Analyst Says XRP Might Be the Best Short in Case of a Bull Trap: Here’s Why

A notable market commentator points to a potential XRP bull trap, advising that the crypto asset might be the best option to short if it plays out. XRP has experienced a noticeable price drop from late March to early April, with its value recently dipping to $2.03, a level last observed on March 11. The trend points to a steady decline, reinforcing the downtrend that has affected XRP over the past few weeks.  Currently trading for $2.05, XRP has seen a 1.65% decrease in the past 24 hours and a 13.08% drop over the last seven days. Despite this consistent downward momentum, some analysts suggest a possible reversal, warning traders to stay alert for any potential market shifts. Analyst Insights: XRP Shorting Opportunity Amid the market uncertainty, Astekz, a noted analyst, has flagged the recent market conditions as potentially leading to a possible "trap" for XRP traders.  https://twitter.com/astekz/status/1907529579717148846 He suggests that although the cryptocurrency has approached a resistance area, it has failed to break through, signaling a potential decline. According to him, this could set the stage for a short-selling opportunity if the price fails to break higher.  Astekz especially expects the downward push to materialize if XRP undergoes a bull trap. Such a bearish price movement occurs when an asset records a fake breakout to the upside during a downtrend, capturing the attention of bullish traders, and then suddenly crashes, "trapping" these bullish positions. Influence of Bitcoin Whales on XRP Meanwhile, another analyst, Vincent Van Code, has identified an intriguing pattern involving Bitcoin (BTC) whales that could be contributing to cases of such bull trap. According to Van Code, large BTC holders have been responsible for significant price fluctuations in the XRP/BTC pair. He claimed that these whales are engaging in massive buy and sell actions, which has created a cascading effect across markets.  In turn, arbitrage bots seem to balance out the XRP/USDT pair, leading to compressed price movements. This observation raises the question of whether these BTC whales are intentionally manipulating XRP's price or simply engaging in swing trading to capitalize on short-term fluctuations. Derivatives Data Points to Bearish Momentum Elsewhere, recent data from Coinglass offers further evidence supporting the bearish outlook for XRP. Notably, the open interest has decreased slightly by 0.34%, signaling reduced participation from long traders. 

Moreover, options volume has dropped significantly by 51.56%, indicating that speculative interest in XRP is waning. These declines, coupled with the negative funding rate, suggest that the market sentiment remains predominantly bearish.