Will the price of XRP fall again?

Ripple (XRP) has recovered from the low of $1.89 recorded on March 11, but is still trading below the important resistance zone. Will the price of XRP be able to maintain this recovery or will it decline further in the coming days?

Daily chart of XRP | Source: TradingView## Funding rate XRP shows bearish sentiment

One of the clearest signs that XRP will face more troubles is the funding rate (negative funding fee) and OI (open interest) decreasing in the XRP futures market.

The funding rate is a periodic payment made between Long and Short traders in perpetual futures to keep the price aligned with the spot market. When the funding rate is negative, Short sellers pay fees to Longs, indicating that bearish sentiment prevails, as is the case with XRP currently.

The funding rate of XRP perpetual futures on all exchanges | Source: GlassnodeThe negative funding rate prevents new buyers from entering the market, as holding Long positions becomes less profitable. If this trend continues, XRP may drop sharply as market confidence erodes further.

Similarly, the OI of XRP in the futures market has decreased from a local peak of $5.67 billion on January 17 to $2.4 billion as of March 18. OI measures the total number of outstanding futures contracts, and the decrease indicates that traders are exiting their positions.

! XRP OI XRP Futures | Source: GlassnodeTraditionally, assets with declining OI will find it difficult to sustain their upward momentum when capital leaves the market. For XRP, this means that even small selling pressure can trigger a series of liquidations, especially if leveraged positions are forced to close. Without renewed interest from institutional or retail traders, the price of XRP will fall even more.

XRP market structure suggests retest of the $1.9 level

The price movement of XRP on the four-hour candlestick chart has drawn a reverse V-shaped pattern, as shown in the chart below.

XRP 4-hour chart | Source: TradingView An inverted V-chart pattern occurs when the price of an asset rapidly rises to the top during a near-vertical rally and then drops abruptly, forming an inverted "V"-like shape. This indicates that buying pressure has dried up. The supply bottleneck between $2.35 and $2.42 is acting as a stiff resistance zone overhead. This is also where the 100-period (SMA) simple moving average and 200-period SMA are currently stopping.

The Relative Strength Index (RSI) has dropped below the 50 mark, confirming the dominance of sellers in the market. Bears will now attempt to break the support zone between $2.28 (, which is the SMA 50), and $2.20. Losing this level will push the price of XRP down to the neckline of the current chart at $2.01. Closing below this level will confirm a continuation of the downtrend, with the next reasonable move being the zone between the low of February 28 at $1.94 and the low range of $1.89 established on March 11.

The bulls must hold above the 50 SMA to prevent the downtrend from continuing. This will help XRP increase its chances of breaking through the supply zone of $2.35 and $2.42, and then reaching the model's peak of $2.47, invalidating the bearish outlook.

The famous analyst Dark Defender remains optimistic about the recovery potential after the downtrend and entering the price discovery process of XRP.

"The main adjustment on the weekly, daily, and 4-hour time frames has ended for XRP," the analyst stated in a post on March 17.

Although there will be many "small fluctuations," he added, this altcoin has "started Wave 1 with a target of $5.85."

The key levels to watch for Dark Defender are support at $2.22 and resistance at $3.39.

"The coming weeks will be wonderful."

Daily XRP chart | Source: Dark DefenderDisclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making any decisions. We are not responsible for your investment decisions

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Dinh Dinh

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