2 weeks ago
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Key Notes
- If XRP price drops below the critical $2 support level, its next possible target will be $1.60.XRP's futures open interest has dropped significantly from $5.67 billion in January to $2.4 billion in March, indicating traders are exiting positions.
- The crypto community anticipates a settlement in the SEC vs.Ripple lawsuit by mid-April .
Although the XRP price has recovered strongly from the support of $1.90, some on-chain indicators point to caution ahead as the Ripple cryptocurrency fails to break past the crucial resistance at $2.40.
While XRP’s price has staged a strong bounce back, its negative funding rate warrants caution for investors hinting at more trouble moving ahead. Funding rates play a crucial role in the derivative markets hinting at periodic payments between long and short traders in perpetual futures contracts.
When funding rates turn negative, it signals that short sellers are paying long traders, reflecting a dominant bearish sentiment in the market. Currently, XRP’s funding rates remain below 0%, highlighting the prevailing bearish sentiment among traders.
The negative funding rates hint at a sharp erosion of market sentiment. Thus, if the trend persists, XRP price can further downside to $2 and below.
Popular crypto analyst Ali Martinez raised concerns regarding the current XRP price action noting a critical lack of support below the $2 level. Martinez noted that if XRP fails to hold above this threshold, the absence of significant support in the range could lead to a sharp decline, potentially pulling the price down to $1.60.
XRP Price Catuin as Open Interest Declines
Another major on-chain indicator that can help decide XRP price action ahead is the XRP futures open interest (OI). According to the data, the OI has crashed from a local peak of $5.67 billion on January 17 to $2.4 billion as of March 18.
Open interest measures the total number of outstanding futures contracts, and its decline indicates traders are exiting their positions. As a result, the reduced capital inflows into the market can lead to further downside price action.
Unless institutional or retail traders show renewed interest, XRP could face further downside risks in the near term.
The entire crypto community is waiting on the sidelines for a probable settlement in the SEC vs Ripple lawsuit. Several pro-XRP lawyers believe that the decision regarding the same could arrive by mid-April next month.
A positive development in the lawsuit could also open the gates of approval for an XRP ETF. Some crypto market analysts believe that this could be a major catalyst for the XRP price rally to $15 and beyond.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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