XRP price could extend decline as futures Open Interest cools
|- XRP extends decline from its record high of $3.66, reflecting headwinds in the broader cryptocurrency market.
- Brazilian securitization and fund management company debuts blockchain-based platform for managing private credit on the XRP Ledger.
- XRP futures Open Interest uptrend takes a breather as RSI decline suggests cooling in the spot market.
Ripple (XRP) price is extending an intraday red candle on Wednesday, trading at around $3.27 in the American session. The decline follows a rejection from Monday's swing, which stopped just shy of the token's record high of $3.66, reached on Friday.
XRP's technical outlook indicates a potential shift to bearishness in the short term, underpinned by a decline in futures contract Open Interest (OI) alongside a decrease in the Relative Strength Index (RSI).
Brazil's VERT brings tokenized credit to the XRP Ledger
VERT, one of the leading providers of securitization and fund management services, has launched a blockchain-based platform to manage private credit on the XRP Ledger (XRPL).
According to the announcement made by Ripple on Wednesday, the "platform was developed to digitally mirror securitization and fund operations, with on-chain records of key events and transactions."
VERT envisions robust capital markets in Brazil, fostering efficiency, transparency and accessibility with the backing of a secure digital infrastructure.
The blockchain platform has already conducted its first successful transaction, which entailed the issuance of an Agribusiness Receivables Certificate (CRA) valued at approximately $130 million.
A CRA refers to a regulated financial instrument used to bundle futures cash flows to create investment products. These investment products are popular in Brazil. They are used to finance agricultural products as well as exports.
The issuance of CRAs on-chain unlocks higher levels of security, transparency, traceability, and efficiency, while leveraging the regulatory-compliant features of the XRPL, including low-cost transactions. Ripple added that the adoption extends to the recently launched XRPL EVM Sidechain, which supports an Ethereum-compatible environment, with smart contracts for automation and reporting.
"We are enabling operation events to be recorded in the most granular way possible, ensuring traceability and transparency with event records increasingly closer to the moment they occur, approaching real time," VERT's Director of Digital Assets, Gabriel Braga, said.
Ripple continues to focus on supporting the tokenization of real-world assets (RWAs) by tapping the XRPL EVM Sidechain, which recently launched on the XRP Ledger mainnet.
Meanwhile, interest in the XRP token on the derivatives market is slowing down, following a sharp rise in the futures Open Interest (OI) to $10.94 billion, the highest level this year.
XRP Futures Open Interest | Source: CoinGlass
CoinGlass data shows the OI averaging $10.79 billion on Wednesday, reflecting a minor drop in interest. The price decline has also seen a surge in liquidations, reaching $29 million over the past 24 hours.
Long position holders accounted for the lion's share of the liquidations at approximately $26 million, with $2.8 million of short positions wiped out.
XRP derivatives market's data | Source: CoinGlass
Technical outlook: XRP bleeds as the RSI drops
XRP price is trading at $3.29 after losing support at $3.40, its previous all-time high. The decline in the Relative Strength Index (RSI) from extremely overbought conditions at 88 to 68 underpins the changing market dynamics, possibly due to profit-taking and sentiment in the broader cryptocurrency market.
A further decline of the RSI would indicate a reduction in buying pressure, which may accelerate the losses in XRP toward lower support levels at $3.20, tested in late January, and $3.00, which was previously tested as resistance in early March.
XRP/USDT daily chart
Traders should also monitor the Moving Average Convergence Divergence (MACD) indicator for further signs of weakness, particularly when the blue line crosses below the red signal line. Such an occurrence would likely result in a sell signal, encouraging traders to reduce their exposure.
Still, the uptrend remains intact if bulls collect liquidity at the current level, keeping the bid for gains above the record high of $3.66 alive.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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