XRP Plummets 5% Amid Bearish Sentiment and Declining Open Interest

XRP, the cryptocurrency associated with Ripple, has recently faced significant downward pressure due to broader market uncertainty and declining open interest among futures traders. Over the past 24 hours, the price of XRP has dropped by 5%, reflecting a broader market downtrend and muted responses to key crypto-related developments. This decline has raised concerns about the future price movements of XRP as market sentiment turns increasingly bearish.

One of the key indicators of this bearish trend is the decline in open interest, which has fallen by 3%. Open interest measures the total number of outstanding derivative contracts that have not been settled. When an asset’s open interest falls alongside its price, it indicates a decline in market participation and increasing uncertainty among traders. This trend suggests that XRP traders are closing positions without opening new ones, signaling weakening market momentum and uncertainty in its price direction.

Adding to the bearish sentiment, XRP’s funding rate has been consistently negative over the past two days. The funding rate is a periodic fee exchanged between long and short traders in perpetual futures contracts to maintain alignment with the spot price. A negative funding rate means that short traders are paying long traders, indicating a prevailing bearish market sentiment. At the time of writing, the funding rate stands at -0.0040%, reinforcing the bearish outlook.

On the daily chart, XRP’s negative Balance of Power (BoP) further indicates a low demand for the altcoin. The BoP measures the strength of buying versus selling pressure by analyzing price movements over a specific period. As of this writing, the BoP is trending downward at -0.38, signaling that sellers are in control. If XRP demand weakens further, its price could break below the support floor of $2.13, potentially triggering a drop toward $1.47.

However, there is still a possibility for a bullish reversal. If the market trend shifts and XRP traders begin accumulating more tokens, its price may rally past the resistance at $2.93 in an effort to reclaim its all-time high of $3.40, last reached in January. This scenario would require a significant shift in market sentiment and increased buying interest.

As XRP navigates through increased selling pressure and a declining open interest, traders remain cautious. The current bearish momentum necessitates vigilant monitoring. Should buying interest resurface, XRP