XRP prices continue to decline as some metrics indicate a bearish outlook for this altcoin.
Cryptocurrency $XRP has decreased by 4.5% in the past 24 hours and over the past week, the price has underperformed most of the top 10 largest market cap cryptocurrencies.
With this altcoin closing three consecutive bearish candles on the weekly chart for the first time since June 2024, the likelihood of retesting the psychological threshold of $2 has increased.
XRP funding rate turns negative
Cointelegraph recently reported that XRP open interest has decreased by more than 54% in three weeks, with over $2 billion in positions being closed. The futures market has not significantly improved since then and currently, a slight increase in open interest has been followed by a negative funding rate.
The negative funding rate indicates that there are currently more traders interested in short positions, with open interest slightly increasing by $77 million over the past day.
Meanwhile, data from CryptoQuant indicates that XRP reserves on the Binance exchange remained stable over the past week after witnessing increased selling pressure from December 14 to December 28. This implies that spot investors are still not interested in building their XRP portfolios, as the market expects prices to be lower due to another profit-taking event.
With spot trading volume slowing down during the recent holiday season, prices are being affected by the prevailing trend which is shifting towards bearish sentiment.
XRP price action is 'weak to the point of being unbelievable'
Technically, XRP is currently breaking out of a symmetrical triangle pattern on the 1-day chart, which could pull this altcoin into the declining liquidity zone between $1.80 and $1.95.
On the 4-hour chart, the altcoin has closed a position below the 200-day EMA for the second time since November 6. On December 20, it closed below the indicator but immediately recovered. However, this time it is slightly less.
Dom, an independent cryptocurrency analyst, also noted that the price of XRP appears 'very weak' and this altcoin is likely to drop to lower levels on the chart.
Through time-based price opportunity analysis, the trader explains that XRP has fallen below $2.15, invalidating the lows of the value area, where there is crucial final support. With the current price around $2.07, where there is a liquidity gap, XRP could drop to $1.90, where there is weaker liquidity, as illustrated previously in the chart.
