The XRP price has been bearish throughout the month of December, with key support zones unable to withstand growing selling pressure. While the altcoin is hovering around the $1.80 price level, recent on-chain evaluations indicate that the XRP price could be in a precarious situation.
A bearish divergence is emerging between the RSI and XRP price
In a Quicktake post on the CryptoQuant platform, market analyst CryptoOnchain says marked that there is a convergence of both technical and on-chain events, revealing an impending bearish phase for the XRP price.
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The analyst first pointed out that the XRP price paints a worrying picture on the weekly chart, basing this hypothesis on the technical context. While XRP price is hovering near recent highs, indicating intent to recover previous levels, its momentum tells a contrasting story.
CryptoOnchain explained that a bearish divergence has emerged between the Relative Strength Index (RSI) and the XRP price. So as the
Typically, this type of divergence indicates weakening purchasing power and declining momentum. Interestingly, historical data shows that this pattern often preceded significant price corrections.
At the same time, XRP price retests the key psychological and technical level at $1.80. The market quant explained that in the event that $1.80 does not hold, the altcoin could soon see the beginning of a rampant dump.
Looking at the broader technical context, it becomes clear that any significant upside attempt is dependent on improving momentum.
Open interest on Binance cascades to new low
CryptoOnchain also mentions a shocking development beneath the surface. The relevant indicator here is the Open Interest, which tracks the total value of all outstanding XRP derivative contracts (on Binance) that have yet to be closed, settled or liquidated at any given time.
XRP’s open interest recently fell to just $450 million, a point that marks the lowest level since November 2024. A sharp drop in open interest generally indicates that there has been a significant outflow of leveraged capital from the futures market.
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This kind of uncontrolled contraction suggests that XRP traders are either forcibly exiting the market or abandoning their positions out of fear. Moreover, the drop in Open Interest, along with weakening price momentum, paints a story about investor interest; it shows market participants taking a step back due to a lack of conviction, rather than positioning themselves for upside continuation.
As these signals converge and expose a strong bearish scenario for XRP, market participants are advised to trade cautiously as the defeat of the key $1.80 level could spell serious trouble for the token’s price. At the time of writing, XRP is valued at around $1.87, with a price increase of 1.5% in the last 24 hours.
Featured image from iStock, chart from TradingView