XRP is experiencing persistent bearish pressure, with short positions prevailing in the derivatives market.
Data from Coinglass reveals that the long/short ratio for Ripple’s XRP stands at 0.9205, indicating that more traders are anticipating a decline rather than a rally. This ratio has consistently stayed below 1 for nearly two weeks, signaling a prevailing bearish sentiment in the market.
Despite a 1.92% decline in open interest, derivatives volume surged by 35%, reaching $3.28 billion. Current market indicators suggest traders remain engaged, favoring short positions as they anticipate a downward movement.
XRP is trading at $2.14, just above a significant support level of $2.05. Should that threshold be breached, it could lead to more significant short-term downturns. The relative strength index currently stands at 47, indicating a neutral position, yet it gradually declines. Given that it has not reached an oversold condition, there remains potential for additional decline.
The recent shift of the moving average convergence divergence into negative territory indicates a potential buildup of downside momentum. The average directional index stands at 11, reflecting an exceptionally low level of trend strength. This suggests that the market is experiencing only erratic sideways movement rather than a definitive trend. Most short—and medium-term moving averages indicate sell signals.
Market analysts are observing a potentially significant shift, indicated by the recent contraction of the Bollinger Bands. The current squeeze coincides with XRP testing its support levels, suggesting that a decline may be more probable than a rebound.
Despite a bearish outlook in the short term, XRP’s fundamentals remain robust. In a significant development, Ripple has successfully settled its legal battle with the Securities and Exchange Commission, alleviating a considerable regulatory burden. There is a growing focus on the potential approval of a spot XRP exchange-traded fund, with Bloomberg analysts estimating an 85% likelihood of this occurring by the end of 2025.
The approval of ETFs may lead to a surge in institutional demand, potentially resulting in significant price increases. In a bold move reflecting its ambitious growth objectives, Ripple made a $4-5 billion bid to acquire stablecoin issuer Circle, though the attempt ultimately fell short.
Despite progress, macroeconomic challenges persist. President Trump’s tariff policies and persistent inflationary pressures are influencing the current risk sentiment. The Federal Reserve’s decision on interest rates on May 7, along with the Consumer Price Index data released on May 13, is capturing significant attention due to their potential influence on the fluctuations of cryptocurrency assets, particularly XRP.
Should XRP dip below $2.05, analysts suggest it may decline to the $1.98–$2.00 range, coinciding with the 200-day support level. Despite the circumstances, the bulls remain elusive. XRP’s potential to rebound from its current range and surpass the $2.20 mark could signal a shift in momentum in its favor. Currently, the likelihood does not favor that decision.