XRP News Today: XRP's $2.40 Support Test: Bullish Rebound or Bearish Breakdown?

XRP, the native token of blockchain firm Ripple, has plunged toward critical support levels amid waning retail demand and broader crypto market weakness, with analysts eyeing a potential test of the $2.20 defense zone, according to an FXStreet analysis. The token, which trades at $2.41 at press time, has lost 8.2% in seven days, reflecting broader risk-off sentiment that has dragged Bitcoin below $108,000 and Ethereum toward $3,700. Derivatives data highlights deteriorating market dynamics: XRP's open interest (OI) has fallen to $4.33 billion from a peak of $9.09 billion in October, while its OI-weighted funding rate has dropped to 0.0010% from 0.0085% last week, signaling a shift toward short-position dominance, as noted in the FXStreet piece.

Technical indicators reinforce the bearish outlook.

XRP's Relative Strength Index (RSI) stands at 41, trending toward oversold territory, while the Moving Average Convergence Divergence (MACD) has crossed below its signal line, a classic sell signal reported earlier. The token is also trading below key moving averages, including the 200-day EMA at $2.60, heightening the risk of a 10% decline should the $2.40 support break. Analysts like Ali Martinez warned in a Benzinga article of a potential retest of $2.25 if downward momentum persists.

Ripple's recent unlocking of 1 billion XRP — a monthly release under its escrow plan — has added to market uncertainty. While the company cited efforts to stabilize liquidity, the move coincided with a $1.2 billion unlock in October, contributing to a single-day liquidation of $19 billion in crypto assets, as previously reported. CoinPedia notes that such unlocks can create short-term selling pressure, though their long-term impact depends on Ripple's strategic use of the tokens. Meanwhile, institutional confidence in XRP's ecosystem remains strong: Ripple's $500 million strategic investment at a $40 billion valuation, led by firms like Citadel Securities and Pantera Capital, underscores growing institutional adoption, according to a Yahoo Finance report.

A potential catalyst for recovery lies in the approval of spot XRP ETFs, which could arrive within two weeks following Ripple's SEC victory, as reported earlier. Proponents argue that institutional-grade products would legitimize XRP's utility, particularly as Ripple expands into corporate treasury management via its RLUSD stablecoin and recent GTreasury acquisition. However, immediate relief appears unlikely, as XRP's market cap — now $144 billion — surpassed BNB's due to Binance's poor performance rather than organic strength, as noted by Invezz.

The path forward hinges on whether bulls can reclaim $2.40 or if bears drive XRP toward $2.20, a level tested in October. Futures data suggests a prolonged bearish streak if the $2.40 threshold fails, while a rebound above $2.70 could reignite bullish momentum, according to the Invezz piece. With the crypto market in a "mid-cycle correction," as per a CoinDesk report, XRP's fate remains intertwined with macroeconomic factors and institutional adoption.