Short sellers maintain control over XRP, raising questions if a price drop below $2.05 is imminent.
XRP's recent performance reveals a tumultuous landscape, with short positions dominating the derivatives market leading to bearish sentiment. As per Coinglass data, the long/short ratio for Ripple's XRP hovers at 0.9205, meaning more traders are betting on a drop rather than an uptick. This trend has persisted for nearly two weeks, signaling a shift towards bearish territory.
Despite a 1.92% drop in open interest, derivatives volume soared 35% to $3.28 billion. This suggests that traders are still engaged but primarily on the short side, expecting a descent. As XRP trades at $2.14, precariously close to the crucial support level of $2.05, a potential breakdown could lead to more significant short-term declines. The relative strength index sits at 47, gradually decreasing but still neutral, leaving room for further declines since it's not yet oversold.
The moving average convergence divergence recently turned negative, hinting at a growing downside momentum. The average directional index, which measures trend strength, stands at 11, demonstrating limited trending activity so far. The majority of short- and medium-term moving averages indicate sell signals.
While the short-term setup remains bearish, XRP's foundations remain robust. A significant burden was lifted with Ripple successfully resolving its legal dispute with the Securities and Exchange Commission. Additionally, the growing interest in a possible spot XRP exchange-traded fund has sparked optimism. Bloomberg analysts anticipate its approval by the end of 2025 with an 85% likelihood.
ETF approvals can drive institutional demand and propel prices significantly higher. Meanwhile, Ripple's unsuccessful offer to purchase stablecoin issuer Circle illustrates the company's ambitious growth aspirations.
Nonetheless, ongoing macroeconomic challenges persist. President Trump's tariff policies and sticky inflation are skewing risk sentiment. The Federal Reserve's May 7 interest rate decision and May 13 CPI data are crucial as they may impact the movements of cryptocurrency assets, including XRP. If XRP breaches the $2.05 support, it might edge towards $1.98-$2.00 where the 200-day support lies. However, the bulls are far from ceding victory. Should XRP rebound from this range and break above $2.20, it could easily reclaim the upper hand. But for now, the odds aren't favorable for such a move.
Meanwhile, the new XRP ETF has amassed an Assets Under Management (AUM) of $67 million, outperforming Ripple. The price rally coincides with the ETF's launch, underlining institutional appetite for XRP.
In the bullish corner, there areXRP's recent positive price movement, holding above $2.20 and prospects of reaching around $3.00 or slightly higher in the near term. This rally is supported by technical indicators such as the breakout from a descending triangle pattern, rising trading volume, and futures-driven momentum — all typically bullish signs. Moreover, there has been significant inflow into XRP-related exchange-traded products (ETPs), indicating growing confidence from institutional investors. Whales have augmented their XRP holdings since late February, further suggesting an impending bullish run. The derivatives market shows a mild bullish bias, with the open interest in XRP derivatives increasing, featuring a long-to-short ratio slightly above 1. Options open interest spiked by more than 20%, signifying active speculative positioning.
Despite these bullish signals, there are also bearish pressures at play. Some technical analyses and forecasts predict a near-term price correction, with certain models projecting XRP could drop by approximately 19-20% to around $1.90 by June 2025 before recovering. Derivatives data reveal a slight bullish inclination but remain a source of potential bearish pressure due to short positions. Ongoing regulatory uncertainty and macroeconomic volatility continue to pose risks that could weigh on XRP's price appreciation.
In summary, while the derivatives market shows a mild bullish bias, it remains a potential source of bearish pressure due to short positions. Regulatory improvements such as the resolution of Ripple's lawsuit and potential ETF approvals are anticipated to boost demand and price stability in the medium term. However, cautious forecasts and macro uncertainties necessitate vigilance as they could potentially pull prices down before a sustained rally materializes. With a realistic near-term target of approximately $3.00, XRP's outlook is cautiously optimistic, balancing strong technical and institutional support against the inherent risks in crypto markets and regulatory environments.
- Amid the bearish sentiment in the derivatives market, traders are primarily betting on a drop in XRP's price, with the long/short ratio hovering at 0.9205.
- Despite a decline in open interest, the derivatives volume for XRP has soared, indicating that traders are still engaged and expecting a descent.
- The new XRP Exchange-Traded Fund (ETF) has amassed $67 million in Assets Under Management (AUM), outperforming Ripple itself, and its launch coincides with a price rally, underlining institutional appetite for XRP.
- Whales have augmented their XRP holdings since late February, further suggesting an impending bullish run.
- Ongoing regulatory uncertainty and macroeconomic volatility continue to pose risks that could weigh on XRP's price appreciation, necessitating vigilance as they could potentially pull prices down before a sustained rally materializes.
