XRP Price Analysis: Is the Recovery from $1.89 Sustainable or Short-Lived?

XRP Price Struggles Below Key Resistance: Will the Recovery Hold?

XRP Price Analysis – XRP’s price has recovered from a recent low of $1.89 on March 11, but it continues to trade below a critical resistance zone, leaving analysts questioning whether the recovery will hold. As of March 18, XRP is hovering around $2.29, but there are signs that further declines may be imminent.

Negative Funding Rates Indicate Bearish Sentiment

A key indicator of potential further downside for XRP is the negative funding rates in its futures markets. Funding rates are periodic payments made between long and short traders to align futures prices with the spot market. When funding rates turn negative, it indicates that short sellers are in control, and bearish sentiment dominates. Currently, XRP’s funding rates are below 0%, suggesting that there is a lack of bullish interest. This trend could discourage new buyers from entering the market, potentially leading to a sharper decline if confidence erodes.

Declining Open Interest Signals Weakening Momentum

Another worrying sign is the decline in open interest (OI) in XRP’s futures market, which has dropped from $5.67 billion in January to $2.4 billion by March 18. A decreasing OI suggests that traders are exiting their positions, weakening the asset’s upward momentum. With reduced institutional and retail interest, even small selling pressure could trigger significant price drops, especially if leveraged positions are forced to liquidate.

XRP’s Market Structure Shows Signs of a Retest of $1.90

XRP’s price action is forming an inverted V-shaped pattern on the four-hour chart, a typical sign of exhausted buying pressure. The $2.35 to $2.42 zone, where the 100-period and 200-period moving averages (SMA) meet, is proving to be a strong resistance. If the price fails to hold above the $2.28 level, it could soon retest the $1.89 to $1.94 range, signaling the continuation of the downtrend.

However, some analysts remain optimistic about XRP’s future. Dark Defender, a well-known crypto analyst, believes that XRP has completed its primary correction and could aim for $5.85 in the long term.

As XRP faces these crucial levels, market participants are watching closely for signs of either a recovery or a continued decline.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.