XRP failed to break through $2.73 - The reason behind the $1 billion evaporation in the futures market!

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XRP has been consolidating below the resistance level of $2.73 for a long time, which has dampened traders' confidence, while the open interest (OI) in the futures market has shrunk by $1 billion in 48 hours, exposing the intensifying bearish sentiment in the market.

Market Status and Trends

Long-term Consolidation: XRP has lingered below the $2.73 resistance level for over a month, lacking signs of a breakout, with insufficient upward momentum in the market.

Declining OI: XRP futures open interest plummeted from $2.9 billion to $1.9 billion, indicating a decline in investor confidence regarding a recent rebound.

Sentiment Shift: The failure to break through has sparked market skepticism, with bearish sentiment dominating.

Network Activity and Investor Behavior

DAA Divergence: Despite a spike in price in late November, the number of active addresses (DAA) did not show significant growth, indicating a disconnection between network participation and price performance, suggesting prices are driven more by speculative trading.

Fundamental Pressure: Insufficient on-chain activity limits the potential for price to maintain upward momentum; unless fundamentals improve, XRP faces the risk of continued consolidation or further declines.

Key Technical Levels

Resistance Level: $2.73 remains a major resistance, with the failure to break through leaving traders feeling despondent.

Support Level: The $2.00 support is considered a crucial psychological and technical level; although XRP has fallen 20% over the past month, it has not yet breached this level.

Future Outlook and Challenges

The outlook for XRP heavily depends on its ability to break through key resistance levels and improve on-chain activity:

Breakthrough of $2.73 Resistance: Expected to reignite market optimism.

Increase in On-chain Activity: Enhancing network fundamentals could provide long-term support for prices.

Market Volatility Management: If it falls below the $2.00 support, it may trigger wider bearish sentiment.

In the current market environment, XRP investors need to pay attention to technical levels and trends in network activity while assessing risks to formulate reasonable trading strategies.

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