Analyst Warns XRP Price Could Face Bearish Breakdown

The XRP price has been experiencing bearish trends throughout December, as critical support levels have been unable to withstand increasing selling pressure. Currently, XRP is trading around the $1.80 mark, and recent on-chain analysis suggests that the situation is increasingly precarious.

Key Takeaways

XRP price remains under pressure, hovering around $1.80.
A bearish divergence has formed between the Relative Strength Index (RSI) and XRP price, indicating weakening momentum.
Open Interest in XRP derivatives has decreased significantly, suggesting traders are exiting the market.
Failure to hold the $1.80 support level could lead to a sharp price decline.

XRP Price

Bearish Divergence Emerging Between RSI and XRP Price

Market analyst CryptoOnchain recently shared insights on the CryptoQuant platform, indicating that both technical indicators and on-chain events point to a potential bearish phase for XRP.

The analyst noted that the weekly chart for XRP depicts a troubling scenario. Although the price appears to be attempting a recovery towards recent highs, its momentum tells a different story.

CryptoOnchain mentioned that a bearish divergence between the Relative Strength Index (RSI) and XRP price is clearly evident. While XRP aims for recent peaks, the RSI shows a consistent downward trend, marking progressively lower highs.

Typically, this divergence signals diminishing buying power and declining momentum. Historical patterns reveal that such phenomena often foreshadow substantial price corrections.

XRP price
Source: CryptoQuant

Currently, XRP is retesting the important psychological and technical support level at $1.80. According to the market analyst, if this level cannot be maintained, there could be a rapid price decline for the altcoin. The overall technical outlook suggests that any significant upward movement will require an improvement in momentum.

Open Interest on Binance Hits New Low

CryptoOnchain pointed out another concerning trend—Open Interest in XRP derivatives has dropped significantly, reaching a low of $450 million, the lowest since November 2024.

Open Interest tracks the total value of all outstanding XRP derivatives contracts on Binance that have not yet been closed, settled, or liquidated. A notable drop in this figure typically indicates that leveraged investments in the futures market are being significantly reduced.

This sharp decline suggests that XRP traders may be either leaving the market under pressure or closing positions out of fear. The combination of falling Open Interest and weakening price momentum reflects a lack of investor confidence, indicating that market participants may be retrenching rather than preparing for price increases.

As these warning signs accumulate, market players are urged to proceed with caution. The failure to hold the significant $1.80 support level could spell serious issues for the token's value. Currently, XRP is priced at approximately $1.87, having seen a 1.5% increase over the past 24 hours.

XRP Price
The price of XRP on the daily timeframe | Source: XRPUSDT chart on TradingView