Will XRP Price Crash Again?

Will XRP Price Sustain Its Recovery or Face Another Drop?

The price of XRP has rebounded from its March 11 low of $1.89, but it remains below a critical resistance zone. This raises the question: will XRP’s recovery continue, or is another downturn imminent?

XRP Funding Rates Indicate Bearish Sentiment

One of the most telling signs of potential trouble ahead for XRP is the presence of negative funding rates and declining open interest (OI) in its futures market.

Key Points:

• Funding rates are periodic payments between long and short traders in perpetual futures contracts, designed to keep prices aligned with the spot market.
• When funding rates turn negative, it means short sellers are paying longs, signaling that bearish sentiment dominates the market.
• Currently, XRP’s funding rates are below 0%, indicating a pessimistic outlook and discouraging new buyers, as holding long positions becomes less profitable.

If this trend continues, XRP could experience further declines as market confidence weakens.

Additionally, XRP’s open interest in the futures market has plummeted from its local peak of $5.67 billion on January 17 to $2.4 billion as of March 18.

• Open interest (OI) measures the total number of outstanding futures contracts.
• A decline in OI suggests that traders are exiting positions, which reduces market liquidity and momentum.

Historically, assets with declining OI struggle to sustain upward momentum. For XRP, this could mean that even moderate selling pressure might trigger a cascade of liquidations, especially if leveraged positions are forced to close. Without renewed interest from either institutional or retail traders, XRP could face more downside risks.

XRP’s Market Structure Signals a Potential Retest of $1.90

The technical chart for XRP reveals a concerning inverted V-shaped pattern on the four-hour candle chart, which indicates potential exhaustion of buying pressure.

Key Takeaways:

• An inverted V-shaped pattern occurs when an asset’s price rises steeply to a peak and then falls just as sharply, forming an upside-down “V.”
• This pattern often signals that bullish momentum is fading.

XRP faces stiff overhead resistance in the supply congestion zone between $2.35 and $2.42, where the 100-period and 200-period simple moving averages (SMA) are located.

• The relative strength index (RSI) has dropped below the 50 mark, reflecting the dominance of sellers in the market.
• The bears will likely attempt to break the support zone between $2.28 (50 SMA) and $2.20.

If XRP fails to hold this support, it could drop toward the neckline of the current chart pattern at $2.01.

• A close below $2.01 would confirm a bearish continuation, with the next potential support range between the February 28 low of $1.94 and the March 11 low of $1.89.

For the bulls to regain control, they must defend the 50 SMA. Successfully holding above this level would improve the chances of XRP breaking above the $2.35–$2.42 resistance zone.

• If this happens, the next upside target would be the pattern’s peak at $2.47, invalidating the bearish outlook.

Crypto Analysts Remain Cautiously Optimistic

Despite the current bearish signals, some crypto analysts remain hopeful about XRP’s long-term prospects.

Prominent crypto analyst Dark Defender believes that XRP could recover from its downtrend and eventually enter price discovery mode.

“The primary correction on the weekly, daily, and 4-hour structure is over for XRP,” Dark Defender stated in a March 17 post on X.

Although the analyst anticipates minor fluctuations ahead, they believe XRP has started Wave 1, with a target of $5.85.

Key Levels to Watch:

• Support: $2.22
• Resistance: $3.39

Dark Defender expressed confidence that the upcoming weeks could be bullish for XRP, potentially leading to significant upward momentum.