Analyst Says XRP Price On The Verge Of Bearish Breakdown

Overview

The XRP price has exhibited bearish trends throughout December, with key support levels failing to withstand growing selling pressure. Recent analysis indicates that the altcoin may be approaching a critical juncture, raising concerns over its future price movements.

Technical Analysis and Market Context

The market analyst CryptoOnchain, in a Quicktake post on the CryptoQuant platform, noted a convergence of technical and on-chain indicators suggesting a potential bearish phase for XRP. The analyst observed that the weekly chart for XRP presents an unsettling picture. Although the price is hovering around recent highs, which might imply a recovery effort, the momentum indicators tell a different story.

A significant observation made by CryptoOnchain is the formation of a bearish divergence between the Relative Strength Index (RSI) and the XRP price. As the price appears to target recent highs, the RSI has shown a consistent decline, forming progressively lower highs. This divergence typically suggests weakening buying strength and declining momentum, which may precede significant price corrections based on historical patterns.

Currently, XRP is retesting the psychological and technical key level of $1.80. The analyst warned that if this level fails to hold, it could trigger a rapid decline in price. This situation emphasizes that any substantial upward movement for XRP will rely heavily on improved market momentum.

Open Interest Trends

In addition to the price analysis, CryptoOnchain highlighted a concerning development regarding XRP’s Open Interest on Binance, which tracks the total value of all outstanding derivatives contracts. Recently, Open Interest fell to a low point not seen since November 2024, indicating a significant outflow of leveraged capital from the futures market.

A sharp drop in Open Interest often signals that traders are either exiting the market or closing their positions due to fear. This decline, coupled with weakening price momentum, suggests that market participants are retreating due to a lack of confidence rather than positioning themselves for potential upward movement.

With these indicators aligning, the outlook for XRP appears increasingly bearish, prompting market participants to exercise caution. The potential failure of the $1.80 support level could lead to serious implications for the token’s price trajectory.

From author

The current analysis of XRP highlights critical technical indicators and market sentiments that could greatly impact its price in the near term. As the situation unfolds, it will be essential for traders and investors to monitor these signals closely. The convergence of bearish technical patterns and declining Open Interest reveals a cautious market atmosphere that may lead to significant decisions by participants.

Impact on the crypto market

• The bearish divergence between the RSI and XRP price may signal a broader lack of confidence among investors.
• A failure to maintain the $1.80 support level could trigger a wave of sell-offs, impacting overall market sentiment.
• The decline in Open Interest suggests a potential retreat from leveraged trading in the XRP market, which could influence liquidity and volatility.
• If XRP experiences a significant price correction, it may have a ripple effect on the altcoin market and investor behavior.
• The cautious stance from traders may lead to a decrease in trading volume, impacting market dynamics and price movements in the short term.