Despite a legal setback for the SEC, XRP’s price has struggled to meet buyer demand. Although a brief wave of bullish momentum led to aggressive buying, it ultimately failed to withstand rising selling pressure near the top. As a result, sellers are now preparing for a possible rally, creating a bearish pattern for the XRP price amid declining open interest.
Traders are showing less interest in XRP futures
With the XRP price showing increasing volatility around $0.55, traders are showing hesitation in initiating futures positions, causing bearish sentiment in the market. Coinglass data shows that XRP’s Open Interest (OI) has fallen from a peak of $553 million to $506 million over the past 48 hours, indicating a $47 million contraction in futures positions.
A drop in open interest can reflect strong bullish or bearish sentiment among traders, depending on the price movement. When both price and OI experience a downturn, it often leads to a bullish market as traders show little interest in futures amid a falling price, thus retaining the potential to reach a robust support level.
Interestingly, the long/short ratio is currently trending towards the confidence of those taking short positions. After falling in recent hours, the ratio is now trading at 0.9309. Currently, bears are maintaining the outlook with 52% of short positions, while bulls are resisting with 48% of long positions, indicating that current sentiment is on a downward trajectory.
Furthermore, with the XRP price continuously falling below the Fib channels, there is a sharp increase in long liquidation. The liquidation chart shows that long positions worth almost $700,000 have been liquidated in the last 24 hours, keeping the bulls out of the current trend and strengthening the resistance level.
What’s Next for the XRP Price?
Buyers are holding the XRP price above the pattern support line at $0.51, indicating small purchases near the price drop. However, bears are trying to slow down buying sentiment by pushing the altcoin below the support line. At the time of writing, the XRP price is trading at $0.521, down over 0.85% from yesterday’s price.
The RSI trendline is making a positive divergence from the centerline and is currently trading at 49. Also, XRP’s momentum within the EMA lines suggests that buyers could soon make a comeback if the price returns from $0.51.
The bulls will challenge the overhead resistance at $0.55. Success in this move could signal the start of a new uptrend, potentially setting the XRP price on a path towards the resistance at $0.64.
On the other hand, if the price fails to gain buying pressure near $0.51 and falls below the uptrend line, it could indicate bulls are capitalizing on gains. This scenario could see the altcoin fluctuate between $0.46 and $0.48 for several more days.