XRP Gains Momentum, Yet Still Far from Its All-Time High

XRP Gains Momentum, But Is the Bull Run Already Losing Steam?

Since its April 7 lows, XRP has increased by over 45%, and as of May 27, it is trading at $2.31. However, the price is still 31% below its top of $3.40 in January 2025, which raises doubts about XRP’s potential for further growth.

Is XRP Losing Steam? Flat Funding Rates Signal Market Indecision

Neutral funding rates and declining open interest (OI) in XRP’s futures markets are two prominent indicators that the cryptocurrency may be in jeopardy. In perpetual futures contracts, funding rates are regular payments provided to long and short-term traders to maintain price alignment with the spot market.

The fact that XRP funding rates have been at zero since February suggests that traders are undecided. Due to the lack of a strong breakout catalyst, the market may continue to consolidate or move sideways.

Falling Open Interest Could Be XRP’s Tipping Point

At the same time, XRP’s OI in the futures market has fallen to $3.2 billion, a 9.6% decrease from its May 13 three-month peak of $3.52 billion. Due to a lack of cash and excitement to push prices higher, assets with diminishing open interest have historically had difficulty maintaining upward momentum.

This may indicate that, in the case of XRP, even slight selling pressure could set off a series of liquidations, particularly if leveraged positions are unwound. If institutional and individual traders don’t show fresh enthusiasm, XRP’s price could revert to a negative trend.

Bearish Triangle Warning: XRP Faces Breakdown Risk Amid Chart Pattern

Since May 14, a descending triangle pattern with a flat support level and a downward-sloping resistance line has been emerging on the four-hour chart of the price of XRP. When a steep upswing is seen as a bearish reversal indicator, a descending triangle chart pattern is created. Generally speaking, the pattern ends when the price drops as much as the triangle’s maximum height and breaks below the flat support level.

Warning: XRP Could Plunge 16% to $1.96 if Support Fails by Month-End

A lack of strength is evident as the bulls are having difficulty maintaining XRP above the 200-day simple moving average (SMA), which is now at $2.18. If this pattern persists, the XRP/USDT pair may decline into the triangle’s support line at $2.28 if it closes below the 200-day SMA at $2.31.

By the end of May, the price of XRP may have dropped 16% from its present levels, approaching the downside objective of $1.96 if this support fails. The descending triangle objective for XRP is consistent with a previous analysis that cautioned that if important support levels didn’t hold, the price might drop as low as $1.61.

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