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XRP has printed an asymmetrical triangle on the daily chart, a technical pattern often associated with strong trend momentum. However, the recent breakdown below this setup and declining XRP futures demand suggest the altcoin could retreat toward the $1.50 mark.
Open Interest Decline Signals XRP Downtrend
On Feb. 25, XRP fell alongside the broader crypto market following comments from U.S. President Donald Trump, who reaffirmed tariffs on imports from Canada and Mexico. The uncertainty surrounding these trade policies triggered a wave of sell-offs, with XRP dropping 22% in just two days, trading at $2.13 at press time.
A key bearish indicator for XRP is the decline in open interest (OI), which measures the total value of outstanding futures contracts. Data from CoinGlass shows XRP’s OI has dropped by 20%, falling from $3.63 billion on Feb. 24 to $2.93 billion—the lowest levels since Jan. 3. Historically, such a sharp decline in OI has preceded major XRP price drops. Notably, a similar pattern occurred in early February when Trump initially announced the tariffs, causing XRP to plummet 43% from $3.13 on Jan. 31 to $1.76 on Feb. 3.
Additionally, XRP funding rates have turned negative, dropping from 0.0077% on Feb. 24 to -0.0003%, indicating increasing bearish pressure. A negative funding rate suggests that traders holding short positions are willing to pay fees to those holding long positions, reflecting heightened selling momentum.
Liquidations Accelerate XRP’s Decline
CoinGlass data further reveals that $57.6 million worth of long XRP positions have been liquidated in the past 14 hours, compared to only $4.71 million in short liquidations. The liquidation of long positions forces bullish traders to sell their holdings, exacerbating downward pressure on XRP’s price.
XRP Chart Breakdown Hints at $1.50 Target
XRP’s price action between Dec. 1, 2024, and Feb. 24 led to the formation of an asymmetrical triangle pattern. However, on Feb. 24, the price broke below the ascending trendline at $2.45 and lost support at the 100-day simple moving average (SMA) at $2.41, confirming a bearish breakout.
Technical analysis suggests that the projected downside target is $1.50, representing a potential 30% decline from the current price. Crypto analysts, including Egrag Crypto and Kwantxbt, have echoed similar sentiments, warning that XRP could retest the $1.61 zone and possibly slide further if $2.00 support fails.
Also Read: XRP Price Crashes 9% – Is a Drop to $1.60 Inevitable? Expert Weighs In
With bearish momentum intensifying, traders should closely watch key support levels as XRP’s downward trajectory unfolds.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
