XRP faces downside risks as low retail activity slows
- XRP edges lower below $1.90 amid technical weakness and increasing macroeconomic uncertainty.
- Retail interest in XRP stalls, with futures Open Interest holding steady at $3.43 billion on Thursday.
- XRP ETFs extend their inflow streak to six consecutive days, with assets under management reaching $1.39 billion.
Ripple (XRP) is trading below the $1.90 mark at the time of writing on Thursday, extending its recent decline as bearish technical signals converge with broader macroeconomic headwinds.
The Federal Reserve (Fed) left interest rates unchanged in the range of 3.50%-3.75% at the end of its monetary policy meeting on Wednesday, potentially limiting liquidity into high-risk assets like XRP.
Mixed signals as retail interest slows while XRP ETFs extend inflows
The cross-border remittance token faces increasing pressure from diminishing retail participation, evidenced by stagnant futures Open Interest (OI). CoinGlass data shows OI averaging $3.43 billion on Thursday, down from $3.45 billion the previous day.
OI tracks the notional value of outstanding futures contracts; hence, low retail activity indicates that investors lack confidence in the token’s ability to sustain an uptrend. Investors are closing positions rather than opening new ones, depriving XRP of the tailwind to keep its uptrend intact.
Meanwhile, XRP boasts unwavering institutional support through US-listed Exchange-Traded Funds (ETFs), which recorded nearly $7 million in inflows on Wednesday. The cumulative total inflow stands at $1.26 billion, and assets under management at $1.39 billion.
XRP has sustained six consecutive days of inflows, underscoring the growing demand for altcoin-based ETFs. This stands in stark contrast to broader crypto market weakness, which saw Bitcoin (BTC) ETFs record nearly $20 million in outflows on Wednesday.
Technical outlook: XRP struggles as bearish signals weigh on price outlook
XRP is trading amid increasing downside risks, macroeconomic uncertainty and risk-off sentiment in the broader cryptocurrency market. The token remains below the 50-day Exponential Moving Average (EMA) at $2.01, the 100-day EMA at $2.14 and the 200-day EMA at $2.28, underpinning the overall bearish outlook.
Meanwhile, the Relative Strength Index (RSI) is falling to 40 on the daily chart, pointing to a buildup of bearish momentum. Further decline toward oversold territory would trigger an accelerated drop, targeting Sunday’s low at $1.81 and April’s support at $1.61.
The Moving Average Convergence Divergence (MACD) remains below its signal line on the daily chart, prompting traders to sell XRP to protect capital amid headwinds.
Any attempt to reverse the trend should be accompanied by high trading volume and push above the 50-day EMA resistance at $2.01. Even so, XRP could remain in bearish hands until bulls reclaim the 100-day EMA at $2.14 and the 200-day EMA at $2.28, thereby opening the door for a breakout toward $3.00.
Open Interest, funding rate FAQs
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
Author
John Isige
FXStreet
John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren
