XRP News Today: XRP Faces 41% Plunge Risk as Bearish Signals Mount

XRP (XRP-USD) is currently hovering around the $2 level, and analysts are warning that if this support level is breached, the cryptocurrency could experience a significant drop. According to the analysis, if XRP falls below $2, it could plummet by 41% to $1.18. The chart indicates a bearish descending triangle pattern, open interest is declining rapidly, and funding rates have turned negative, all of which suggest growing bearish sentiment.

Open interest for XRP has decreased by 36% in just over a month, falling from $5.53 billion to $3.54 billion. This decline in open interest is a warning sign, as it typically indicates a lack of conviction among traders and often precedes a price drop. Historically, when open interest collapses, the price of XRP tends to follow suit. For instance, in January, a 74% drop in open interest led to a 32% decrease in price. This pattern has been observed before and usually results in further declines for the bulls.

Additionally, funding rates have turned negative, dropping from 0.0057% to -0.0068% overnight. This shift suggests that short sellers are gaining control and betting on lower prices. The market is not just showing signs of weakness but also growing momentum in the opposite direction.

XRP’s price action is forming a classic descending triangle on the daily chart, characterized by flat support, lower highs, and increasing pressure. This pattern is a classic setup for a breakdown. If the price breaks through the $2 support level, the measured move of the triangle could drag the target down to $1.18, representing a 41% fall from current levels. The bulls are showing little strength at this support zone, and if they fail to defend it, the next leg down could arrive swiftly.

Technical indicators for XRP are heavily bearish. On the daily timeframe, most moving averages are flashing “Strong Sell,” with 11 bearish signals and just one bullish. The 20-day and 50-day exponential moving averages are both above XRP’s current price, reinforcing the downside setup. Only the MACD shows a faint glimmer of optimism, but it is not enough to shift the overall momentum. XRP is not just under pressure; the technical dashboard is lighting up red.

If XRP manages to hold above $2, there is still hope. A breakout above $2.22, where the 50-day and 100-day moving averages converge, would cancel out the bearish pattern and open the door back to $3.00. However, this is a significant challenge in a market that is increasingly tilting bearish by the hour. Essentially, $2 is the make-or-break line. Lose it, and XRP doesn’t just stumble; it drops through the floor.