Ripple Price Forecast: XRP stares at deeper losses as retail demand fades
- XRP slides below the pivotal $1.40 threshold, risking an extension of its decline amid deteriorating market sentiment.
- XRP derivatives shed last week’s gains amid a sharp drop in futures Open Interest to $2.78 billion on Monday.
- XRP momentum indicators weaken further with the RSI in bearish territory and the MACD maintaining a sell signal.
Ripple (XRP) remains pressured below $1.40 at the time of writing on Monday, reflecting a broader sell-off in the crypto market. Attempts to break the $1.50 supply level failed last week as investors reacted to rising inflation in the United States (US) and the persistent conflict in the Middle East.
XRP faces cooling retail demand as sentiment deteriorates
The crypto Greed & Fear Index aligns with the fading risk appetite, dropping sharply to 28 in the fear territory on Monday, compared to an average of 48 in the neutral territory observed last week.
Growing risk-off sentiment could further weaken XRP, breaking the structure from neutral as observed over the last few weeks back to strongly bearish.
The derivatives market reflects the narrowing sentiment, as futures Open Interest (OI) declines to $2.78 billion on Monday, from $2.86 billion the previous day.
According to CoinGlass data, the OI surpassed $3 billion on Friday, marking the highest level since late January. If the current lack of investor interest continues, it may further destabilize the market, intensifying selling pressure during this prolonged drawdown.
Meanwhile, demand for XRP spot Exchange-Traded Funds (ETFs) remained steady, beating Bitcoin (BTC) and Ethereum (ETH) to post inflows totaling $61 million last week.
Cumulative inflows average $1.39 billion, increasing from $1.32 billion the previous week. Total assets under management increased slightly to $1.18 billion from $1.12 billion over the same period.
The ETFs' performance this week could help shape sentiment around the remittance token, with steady inflows driving a positive turnaround above the pivotal $1.40 level.
Price analysis: XRP wobbles as sellers tighten grip
XRP trades above $1.38 but remains under pressure as it holds below the reclaimed support-turned-resistance from the broken ascending trendline around $1.39. The price also trades beneath the 50-day, 100-day and 200-day Exponential Moving Averages (EMAs) at $1.42, $1.49 and $1.70, respectively, keeping the broader tone bearish.
The Relative Strength Index (RSI) has slipped back toward the mid-40s on the daily chart, hinting at fading bullish momentum after the recent failure to sustain gains, while the Moving Average Convergence Divergence (MACD) histogram has turned further negative, reinforcing the view that rallies are likely to be absorbed for now.
On the topside, immediate resistance lies at the former uptrend support zone near $1.39, with a daily close above it needed to ease short-term pressure. Further up, the 50-day EMA at $1.42 is the next obstacle, ahead of the 100-day EMA at $1.49, while the 200-day EMA at $1.70 marks a more distant bearish cap. Initial support lies slightly below the spot at $1.35, where fresh demand could emerge. However, if the sell-off persists, the next key demand level is at $1.30.
(The technical analysis of this story was written with the help of an AI tool.)
Open Interest, funding rate FAQs
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
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