XRP (XRP) price has declined by 4.5% over the past 24 hours, and in the last week it has underperformed most of the top-10 largest market capitalization cryptocurriencies.
XRP weekly chart. Source: Cointelegraph/TradingView
With the altcoin closing three consecutive bearish candles on the weekly chart for the first time since June 2024, the probability of re-testing its psychological level at $2 has increased.
XRP funding rate turns negative
Cointelegraph recently reported that XRP open interest dropped by more than 54% in three weeks, with more than $2 billion in positions being closed. The futures market hasn’t improved significantly since then, and at the moment, a slight increase in open interest was followed by a negative funding rate.
XRP aggregated funding rate and open interest chart. Source: Velo.data
A negative funding rate indicated that more traders were currently interested in short positions, with open interest increasing by a marginal amount of $77 million over the past day.
Meanwhile, data from CryptoQuant indicated that the 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 implied 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.
XRP reserves on Binance exchange. Source: CryptoQuant
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.
Related: XRP price warning signs emerge after 300% gains in two months
XRP price action is “incredibly weak”
From a technical perspective, XRP is currently breaking out of its symmetrical triangle pattern on the 1-day chart, which may drag the altcoin into the downside liquidity zone between $1.80 and $1.95.
XRP 4-hour chart. Source: Cointelegraph/TradingView
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. However, it is a little less this time around.
Dom, an independent crypto analyst, also said that XRP’s price action looked “incredibly weak,” and the altcoin is possibly looking to drop lower in the charts.
XRP analysis by Dom. Source: X.com
Through a time-price opportunity analysis, the trader explained that XRP’s 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, as illustrated earlier in the chart. The trader added,
“Let me be wrong, but I am prepared for another leg down along with BTC.”
Related: BTC price ‘breakdown confirmed?’ 5 Things to know in Bitcoin this week
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.
