Cryptocurrency trader Ali Martinez says a payments-focused altcoin must stay above a key price level to avoid a steep corrective move.

Martinez tells his 133,500 followers on the social media platform X that if XRP (XRP) falls below $2, it risks witnessing a deeper drawdown due to a lack of consolidation below the price level.

“XRP testing the waters! Below $2, a gap with no significant support could pull it to $1.60.”

Based on a chart citing on-chain data from blockchain analytics platform Glassnode, it appears that there’s an “air gap” between $2 and $1.60, indicating a weak foundation for XRP around that price zone.

XRP is trading at $2.56 at time of writing.

Next up is the layer-1 protocol Solana (SOL). According to Martinez, SOL is facing a “big test” at a resistance level a few percentage points above the current price.

“$135 stands as the most important resistance.”

The widely followed analyst further says that investors in the sixth-largest crypto asset by market cap are capitulating based on the altcoin’s net unrealized profit/loss metric (NUPL), an on-chain indicator that measures whether accumulators of a coin are in a state of profit or loss.

Based on the trader’s chart, SOL’s NUPL is hovering below the zero line, indicating that investors are witnessing losses and in the midst of capitulation.

Solana is trading at $132 at time of writing, down by around 55% from the all-time high price of $293 reached January 20th.

Looking at the top memecoin Dogecoin (DOGE), Martinez says that the altcoin has recorded significant demand in a week.

“Whale alert! Over 110 million Dogecoin bought up in a week. Big players are betting on a breakout.”

Dogecoin is trading at $0.173 at time of writing.

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The analytics firm Glassnode has revealed the Solana price levels that could be important to watch, based on on-chain accumulation data.

Solana Cost Basis Distribution Reveals Where Supply Is Most Concentrated

In a new post on X, Glassnode has discussed about the UTXO Realized Price Distribution (URPD) of Solana. The URPD is an indicator that basically tells us about how much of the SOL supply was purchased at which price levels. Naturally, the metric uses the last transaction price of any token in circulation as its cost basis.

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First, here is how the URPD looked when the cryptocurrency set its new all-time high (ATH) back in January:

From the graph, it’s apparent that a few price levels like $144 stood out in terms of the amount of supply that they hosted. At the price levels closer to the new ATH, however, supply was quite thin, meaning not many coins changed hands there.

In on-chain analysis, the potential of any level to act as support or resistance is measured in terms of the amount of supply that it hosts. This means that levels that have a large cluster around them on the URPD are the ones of importance to the asset.

As for why this is so, the answer lies in investor psychology: holders are sensitive to retests of their cost basis. Whenever the price touches a large cost basis cluster, the investors who are holding these coins may respond by making some panic moves.

These moves can tend toward buying if the retest is happening from above, as investors may want to defend their profit-loss boundary. In retests happening from below, however, the traders could react by selling instead, as they may seek to exit at their break-even.

When SOL reached its ATH, there was a lack of support nearby. This may be why the asset ended up falling into the cluster that did carry a significant amount of supply. Below is a chart that shows how the URPD has changed following the price drawdown.

From the graph, it’s visible that if SOL continues its downtrend, it may have to end up relying on the freshly grown $112 level. In January, this level hosted the cost basis of 4 million tokens, but today, the figure has grown to 9.7 million, equivalent to 1.67% of the entire supply.

Beyond this level, Glassnode notes, “$94, $97, and $100 collectively hold nearly 21M SOL (3.5% of supply).” In the scenario that these support levels fail, Solana may find itself in trouble, as there aren’t any major supply clusters until $53.

Related Reading

In terms of the levels above, the $135 and $144 levels stand out, as they hold the acquisition level of 26.6 million and 27 million coins, respectively. These levels could act as major obstacles in SOL’s recovery.

SOL Price

Solana has jumped more than 5% over the last 24 hours to recover to the $130 level.

Featured image from Shutterstock.com, Glassnode.com, chart from TradingView.com

A closely followed crypto analyst and trader is warning that the payments token XRP is at risk of a massive collapse.

In a new post, crypto trader Ali Martinez tells his 133,300 followers on the social media platform X that XRP may be forming a bearish head-and-shoulders pattern (H&S) on the daily chart.

A head-and-shoulders pattern typically suggests that an asset is losing momentum and could reverse its uptrend if the price breaks below the structure’s support.

“XRP is shaping up a head-and-shoulders on the weekly chart. It spotlights the $2 support. Holding it is crucial.”

Looking at the trader’s chart, he seems to predict that XRP will fall to $1.255 if crypto bears shatter support at $2.

XRP is trading for $2.38 at time of writing, up 2.3% in the last 24 hours.

Next up, the analyst suggests Solana (SOL) may soar to the upper bound of an ascending channel after respecting the pattern’s diagonal support around $126.

An ascending channel is traditionally seen as a bullish pattern, indicating that an asset is printing higher highs and higher lows.

“Solana set to bounce? Eyeing a climb from the channel’s base to the upper resistance at $140.”

Solana is trading for $129 at time of writing, up 1% in the last 24 hours.

Lastly, the trader says the smart contract project Qtum (QTUM) may be gearing up for a huge corrective move if it moves below a key support level that has remained intact since November 2022.

“QTUM could be on the verge of a breakout! Keep an eye on the $1.88 support level.”

Based on the trader’s chart, he appears to predict that QTUM may plunge to as low as $0.63.

QTUM is trading for $2.23 at time of writing, up 4.2% in the last 24 hours.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: Midjourney