Introduction
The XRP (Ripple) price has taken a significant hit over the past 24 hours, declining by 4.5%. This comes after underperforming most of the top-10 largest market capitalization cryptocurrencies in the last week.
Weekly Chart Analysis
The altcoin’s weekly chart shows three consecutive bearish candles for the first time since June 2024. This is a concerning trend that could lead to re-testing its psychological level at $2.
Funding Rate Turns Negative
Cointelegraph recently reported that XRP open interest dropped by more than 54% in three weeks, with over $2 billion in positions being closed. Despite a slight increase in open interest over the past day, the funding rate has turned negative.
A negative funding rate indicates that more traders are currently interested in short positions, with open interest increasing by a marginal amount of $77 million over the past day.
Binance Exchange Reserves
Data from CryptoQuant shows that XRP reserves on the Binance exchange have remained flat over the past week after witnessing increased selling pressure between Dec. 14 and Dec. 28. This implies that spot investors are yet to take an interest in building their XRP portfolios, with markets expecting a lower price due to another bout of profit-taking.
Holiday Period and Market Sentiment
With spot volumes slowing down over the past holiday period, prices are at the mercy of the dominant trend, which is now moving toward bearish sentiment.
Technical Analysis
From a technical perspective, XRP is currently breaking out of its symmetrical triangle pattern on the 1-day chart. This may drag the altcoin into the downside liquidity zone between $1.80 and $1.95.
On the 4-hour chart, the altcoin closed a position below the 200-day EMA level for the second time since Nov. 6. On Dec. 20, it closed below the indicator but an immediate recovery was attained.
Price Action Analysis by Dom
Dom, an independent crypto analyst, has also commented on XRP’s price action, stating that it looks "incredibly weak" and that the altcoin is possibly looking to drop lower in the charts.
Through a time-price opportunity analysis, the trader explained that XRP dropped below $2.15, invalidating the value area low level, where the last key support was observed. With prices currently around the $2.07 mark, where there is a liquidity void, XRP may drop to $1.90, where a weaker liquidity zone is present.
Conclusion
The XRP price decline is a concerning trend that could lead to re-testing its psychological level at $2. The bearish sentiment in the market, combined with the negative funding rate and flat Binance exchange reserves, suggests that spot investors are yet to take an interest in building their XRP portfolios.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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