XRP Plummets 9% Amid Market Uncertainty and Bearish Sentiment

XRP, a prominent cryptocurrency, has experienced a significant decline in market activity, with its price dropping by 9% over the past 24 hours. This downturn mirrors the broader market trend, which has shown a muted response to recent developments such as the creation of the Strategic Bitcoin Reserve by Donald Trump and the conclusion of the White House Crypto Summit. The overall market sentiment has shifted, with XRP's bullish bias weakening and volatility increasing, suggesting potential further price declines in the near term.

As XRP's price has dipped, its open interest among futures traders has also decreased, currently standing at $3.39 billion, reflecting a 3% drop over the same period. 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. This trend suggests that XRP traders are closing positions without opening new ones, signaling weakening market momentum and uncertainty in price direction.

Additionally, XRP's funding rate has been consistently negative over the past two days, currently at -0.0040%. The funding rate is a periodic fee exchanged between long and short traders in perpetual futures contracts to keep the contract price aligned with the spot price. A negative funding rate indicates that short traders are paying long traders, suggesting a higher demand for short positions and reinforcing bearish sentiment in the market.

On the daily chart, XRP's negative Balance of Power (BoP) reflects the altcoin's low demand, currently at -0.38. The BoP measures the strength of buying versus selling pressure by analyzing price movements over a given period. A negative BoP value indicates 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. Conversely, if the market trend shifts bullish and XRP traders begin to accumulate more, its price could rally past the resistance at $2.93 in an attempt to reclaim its all-time high of $3.40, which was last reached on January 16.