XRP Faces Bearish Technical Signals
XRP has confirmed what technical analysts call a death cross pattern on its daily chart, which occurs when the 50-day moving average crosses below the 200-day moving average. This development comes as the broader cryptocurrency market experiences significant selling pressure, with Bitcoin dropping below $97,000 for the first time since May.
According to market data, XRP fell about 7% over the past 24 hours, hitting an intraday low of $2.27 before recovering slightly to around $2.32. The token currently trades about 36% below its all-time high of $3.65 reached in mid-July. I think this decline reflects broader market sentiment rather than XRP-specific issues, though the technical picture certainly doesn’t help.
Market Factors Weighing on XRP
The downturn appears to be driven by several factors. Rising U.S. Treasury yields have made government bonds more attractive to investors, pulling capital away from riskier assets like cryptocurrencies. This rotation out of risk assets has affected the entire crypto space, not just XRP.
Derivative market activity also suggests weakening conviction among traders. Open interest in XRP futures has dropped significantly to $3.63 billion, well below the $8.36 billion level seen in early October. When open interest declines like this, it typically means traders are closing positions and stepping back from the market.
Adding to the bearish sentiment, the long/short ratio currently sits at 0.88, indicating that more traders are betting on further downside than upside. This positioning can influence spot market participants and create a self-reinforcing cycle of selling pressure.
Technical Outlook and Potential Support Levels
Looking at the chart patterns, XRP has been trading within a descending parallel channel since mid-July. This pattern typically signals that the broader trend remains downward, with rallies often meeting selling pressure at the upper channel boundary.
The combination of the death cross and descending channel suggests XRP may continue facing headwinds in the near term. The $2 level appears to be a critical support area, aligning with the 50% Fibonacci retracement level. If this support holds, it could provide a foundation for stabilization.
However, if the $2 support breaks, the next significant level to watch would be around $1.90, which represents the June low and sits about 18% below current prices. That would be quite a significant drop, though not unprecedented in crypto markets.
Potential Catalysts for Recovery
There are some potential positive developments that could help XRP recover. The recently launched Canary Capital spot XRP ETF generated $58 million in trading volume on its first day. If this fund continues to attract steady inflows, it could provide meaningful support for the token.
A move toward the $2.58-$2.65 resistance zone would be the first sign of a potential turnaround. Breaking above this level decisively could help XRP escape the descending channel pattern and potentially mark the beginning of a more sustained recovery.
For now, though, the technical picture remains challenging. The death cross pattern historically has been followed by extended periods of weakness, so traders might want to watch how the $2 support level holds up in the coming days. Market conditions can change quickly in crypto, so while the current setup looks bearish, things could shift with the right catalyst.
