The Dangers of Losing Support: XRP's Potential Slide Toward $1

XRP price outlook: Here is why XRP risks losing $1

Rising activity is clashing with waning momentum, as XRP’s price faces difficulties, raising warning signals. Despite a notable increase in trading volume, the price has not responded positively.

Key Takeaways

XRP's trading volume increased to over $1.9 billion, a 19% rise in one day, yet the price fell.
The formation of a head-and-shoulders pattern on the daily chart indicates potential weakness.
Open Interest has decreased by 8.43%, showing traders are hesitant to purchase more XRP at this time.
Negative funding rates suggest increasing conviction from short-sellers.
High liquidation risk at levels around $1.85 could lead to further declines if key support levels are lost.

Price Struggles Amid High Volume

Currently, Ripple's XRP is trading at approximately $1.86, indicating a nearly 2% decline over the past 24 hours. This showcases a diminishing control from buyers as short-term rallies fail to gain momentum and support areas are consistently tested.

Head-and-Shoulders Pattern Triggers Red Flags

On the daily chart, XRP has formed a classic head-and-shoulders pattern. The left shoulder emerged around $2.30, followed by a significant rally to the head near $3.00. However, momentum has sharply declined since then.

The right shoulder encountered strong resistance near $2.50, highlighting buyer fatigue. Presently, the price is pressing against the support neckline, situated between $1.85 and $1.80. Each bounce from this area seems weakened, with sellers fiercely defending the declining resistance around $1.95.

This pattern suggests distribution rather than consolidation. Importantly, XRP is currently trading below the outlined right shoulder trendline. Therefore, failing to reclaim the $2.00 level may maintain bearish sentiment. A decline beneath $1.80 could lead to further downward movement.

XRP price technical analysis Source: TradingView

Open Interest Drop Signals Caution Among Traders

The Open Interest has fallen sharply, down 8.43% to $3.26 billion, sending clear signals about market sentiment. As XRP struggled near its support levels, traders moved to reduce their leverage rather than increase their positions.

In strong market conditions, Open Interest typically grows alongside price increases. However, the current situation shows long traders unwinding their positions as prices continue to stagnate. The selling pressure remains elevated even as shorts reduce their size, resulting in a persistent downward drift in price without the support of strong counter-pressure.

Without new leverage entering the market above $1.90, buyers may find it challenging to absorb supply effectively, maintaining a heightened risk of declines.

Open Interest and Liquidation Data Source: CoinGlass

Negative Funding Rates Indicate Increasing Short-Side Conviction

The OI-Weighted Funding Rates have turned negative, sitting near -0.0010% at the last check. This change indicates increased intentions within the derivatives markets, as short traders incur costs to maintain their positions while long traders step back.

Whenever the price approaches $1.90–$1.95, the influx of selling pressure becomes notable. Moreover, the negative funding conditions persist through multiple sessions, which solidifies bearish positions.

Negative funding during challenging support tests significantly amplifies risk. Short-sellers grow more comfortable, pushing prices down, particularly below $1.85, while buyers remain hesitant, awaiting validation that never appears. As a result, XRP lacks any upward momentum, and this funding structure further trends toward downside instability.

Funding Rates Analysis Source: CoinGlass

Liquidation Data Signals Concentrated Downside Potential

The Liquidation Heatmap indicates a heavy concentration of liquidity just beneath XRP’s critical price points. Major liquidation clusters exist around $1.85, with additional concentrations between $1.80 and $1.77.

As XRP trades near $1.86, it hovers above a high-risk liquidation zone. The potential for upward movement diminishes rapidly beyond $1.95, while concentrations of downside liquidity are robust. When momentum falters, prices often gravitate towards these liquidity pockets.

Consequently, a drop below the $1.85 mark could result in increased liquidations stretching down toward $1.80. If $1.77 fails to hold, the price could further decline to levels around $1.60–$1.50, amplifying bearish pressure.

Liquidation Heatmap Analysis Source: CoinGlass

Ultimately, XRP displays synchronized weakness in its price structure, leverage, funding rates, and liquidity. Each indicator reinforces a bearish outlook. Buyers are cautious near resistance, while sellers are aggressive in defending crucial zones. Even as volume increases, there is no continuation upward.

Open interest trends downward rather than increasing, funding rates favor shorts, and liquidation clusters are primarily located lower. All these factors contribute to a heightened probability of further declines. Should the XRP price breach the $1.80 level, momentum may accelerate quickly, bringing the psychological barrier of $1.00 into focus. Unless buyers can reclaim dominance above $2.00, the threat of XRP losing its grip on $1 remains a serious concern.

Final Thoughts