XRP's price decrease today may be attributed, among other things, to a choppy risk-on mentality ahead of Nvidia's results and cautious sentiment in the futures market.
As of today, XRP has dropped almost 3% to about $0.56 in the previous day, following other negative trends in the cryptocurrency market as the Nvidia earnings announcement was approaching.
The crypto market was set in motion by Nvidia's results.
When the $3.2 trillion chipmaker Nvidia gets ready to disclose its earnings report following the closing of the US market on August 28, all eyes will be on it. Analysts predict that the current quarter will see a 70% increase in sales due to the spike in demand from the artificial intelligence industry.
Because of this link, the overall trajectory of cryptocurrencies is similar to the erratic trend of the Nasdaq, which is driven by the Nvidia earnings countdown.
XRP open interest and declining financing rates
According to CoinGlass data, XRP's losses are correlated with steep drops in financing rates and open interest (OI) in its futures market.
XRP futures open interest as of today was about $616.88 million, down from $679.81 million the day before. The XRP futures financing rates, which are determined every eight hours, decreased to -0.0102% from 0.0101 during that time.
The unwinding of bullish bets or a loss of trust in the direction of the market are indicated by the fall in XRP OI. It can also mean that, in reaction to the recent drop in price, some traders are trimming losses or taking gains.
Negative funding rates, however, show that short bets are now the majority. When financing rates are negative in future markets, traders will be more pessimistic since shorts will compensate longs to maintain their positions.
Technicals for XRP point to a future increase.
The current falls in XRP are a component of a corrective trend that is taking place inside its dominant ascending triangle pattern.
Notably, similar to other declines, the cryptocurrency has retreated by almost 10% after hitting the top trendline of the triangle as resistance.
With an eye toward a comeback to the higher trendline level at about $0.63, XRP is currently probing the bottom trendline of the triangle as support as of August 28.
The comeback scenario is also supported by XRP's daily relative strength index, which is making higher lows while staying within the neutral reading range of 30 to 70.
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