XRP price has been bearish throughout December, with major support zones unable to withstand increasing selling pressure. Although the altcoin has been hovering around the $1.80 price level, recent on-chain valuations indicate that the XRP price could fall sharply. unstable situation.
Bearish divergence materializes between RSI and XRP price
market analyst CryptoOnchain said in a Quicktake post about the CryptoQuant platform. highlighted Both technical and on-chain events are converging, revealing an impending bearish phase in XRP price.
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The analyst first pointed out that the XRP price is painting a disturbing picture on the weekly chart, based on assumptions based on technical background. While XRP price has been hovering near recent highs, indicating intent to recover to previous levels, its momentum tells a contrasting story.
CryptoOnchain explained that there is a bearish divergence between the Relative Strength Index (RSI) and the XRP price. Therefore, while the XRP price seems to be heading towards the recent highs, the RSI shows a clear decline and is gradually lowering the highs.
This type of divergence typically indicates weakening purchasing power and loss of momentum. Interestingly, historical data reveals that this pattern has existed for some time. Significant price correction.
At the same time, XRP price happens to retest the important psychological and technical level of $1.80. The market quant explained that if the altcoin fails to sustain $1.80, an unlimited fire sale could begin soon.
Looking at the broader technical picture, it is clear that momentum needs to improve if we are to move significantly higher.
Binance open interest cascades to new lows
CryptoOnchain also mentions some shocking developments behind the scenes. The relevant metric here is open interest, which tracks the total value of all outstanding XRP derivatives contracts (on Binance) that have not yet been closed, settled, or liquidated at a given point in time.
XRP open interest recently fell to $450 million, its lowest level since November 2024. A sharp decline in open interest usually indicates a significant outflow of leveraged funds from the futures market.
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This kind of unchecked contraction suggests that XRP traders are either being forced out of the market or are abandoning their positions out of fear. Furthermore, the decline in open interest along with weakening price momentum paints a story about investor interest. This indicates that market participants are retreating due to a lack of conviction, rather than being open to continuing the rally.
With these signals converging to reveal a strong bearish scenario for XRP, market participants are advised to tread carefully as a defeat of the $1.80 key level could mean serious problems for the token price. As of this writing, XRP is worth approximately $1.87, with a 1.5% price increase over the past 24 hours.
Featured images from iStock, charts from TradingView
