XRP extends decline as muted on-chain activity, bearish technicals weigh
- XRP extends losses, trading around $1.08 on Wednesday, reflecting a broader crypto market sell-off.
- Reduced demand for XRP digital investment products and cooling on-chain activity weigh on price action.
- The XRP technical structure deteriorates as reflected in the RSI dropping below the midline and the major moving averages trending lower.
Ripple (XRP) continues to trade under heavy selling, trading below $1.10 at the time of writing on Wednesday. The remittance token marks four consecutive days of declines, weighed down by geopolitical tensions and significantly low risk appetite.
Capital outflows, weak on-chain activity keep XRP under pressure
XRP spot Exchange-Traded Funds (ETFs) activity remained muted on Tuesday and Monday, with no flows recorded, according to SoSoValue data. This muted activity suggests a withdrawal of demand rather than a complete loss of conviction in the digital asset. However, capital inflows remain pivotal in absorbing selling pressure and sustaining recoveries.
Cumulative inflows total $1.49 billion, with net assets under management at $1.02 billion, reinforcing investor long-term conviction in XRP.
On-chain activity is weakening, according to Santiment’s data, showing active addresses at 14,500 on Wednesday, down from roughly 31,000 the day before. A wider scope cements the decline, given that network users sending and receiving assets on the XRP Ledger (XRPL) peaked at 43,000 on June 30. If sustained, the low on-chain activity would continue to weigh on demand, further limiting XRP’s upside.
Retail demand for XRP is similarly suppressed, as futures Open Interest (OI) steadies at 213 billion XRP on Wednesday, up only marginally from 2.12 billion XRP the previous day. Nonetheless, CoinGlass data shows a gradual but sustained drop from 2.38 billion XRP on June 23, undermining investor appetite.
Price analysis: XRP eyes short-term support at $1.05
XRP trades at $1.08, extending a corrective phase below its key Exponential Moving Averages. The 50-day EMA at $1.18, together with the 100-day EMA at $1.28 and the 200-day EMA at $1.49, sits overhead and suggests a capped, bearish near-term bias while price remains under this layered resistance zone.
The Moving Average Convergence Divergence (MACD) indicator edges in positive territory and hints at modest bullish momentum that has yet to challenge the dominant overhead structure on the daily chart. At the same time, Relative Strength Index (RSI) around 42 reinforces a consolidative tone rather than an immediate recovery.
On the topside, initial resistance lies at the 50-day EMA around $1.18, and a sustained move above this level would expose the next barrier at the 100-day EMA near $1.28 before the broader bearish framework defined by the 200-day EMA at $1.49 comes into view. Looking down, the first notable support emerges at the Parabolic SAR level around $1.02, where a break lower would likely revive selling pressure and open the door to further declines. On the other hand, a defensive hold above this marker would allow bulls to keep probing the clustered EMA resistance overhead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Open Interest, funding rate FAQs
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
Recommended Articles
Comments (0)
Click the $ button, enter the symbol, and select to link a stock, ETF, or other ticker.