XRP falls as bearish derivatives data caps recovery prospects

Key takeaways

• XRP has lost more than 2% over recent days.
• On-chain metrics point to sell-side dominance in the XRP market.
• XRP’s long-to-short ratio of 0.83, combined with a negative funding rate, indicates a bearish stance.
• The token is nearing critical support at its 200-day EMA around $1.354.

Ripple’s XRP remained under pressure on Thursday, declining more than 2% over the week. The digital asset is nearing a key support zone that could determine its next move. Yet sell-side pressure, cautious on-chain signals and mixed derivatives positioning suggest its near-term upside may stay limited.

On-chain data for XRP points bearish

A CryptoQuant market roundup signals caution for altcoins overall. XRP’s futures market shows signs of overheating and sell-side dominance, with retail traders contributing to some of the activity. Similar overheating is emerging in the spot market, though several other indicators remain neutral.

Together, these data points reflect cautious and moderately bearish sentiment among XRP market participants.

Derivatives positioning reveals contrasting sentiment between XRP and Stellar traders. XRP’s long-to-short ratio dropped to 0.83 on Tuesday, nearing its lowest level in a month.

A ratio below 1 indicates short positions exceed long positions, meaning more traders expect XRP’s price to fall.

The XRP funding rate turned negative on Wednesday and sat at -0.0012% on Thursday. A negative funding rate means short-position holders are paying long-position holders, reinforcing a bearish outlook for the token.

XRP nears the critical 200-day EMA

XRP was trading at approximately $1.392 on Thursday after dropping more than 2% this week. Despite the decline, the token remains above its 50-day, 100-day and 200-day exponential moving averages. Those indicators are clustered between roughly $1.244 and $1.354, preserving XRP’s constructive underlying structure as long as they hold.

The Relative Strength Index is in the mid-50s, suggesting bullish momentum has eased but not vanished entirely. Meanwhile, the Moving Average Convergence Divergence line remains below zero, indicating weakening upside momentum.

XRP’s first major support is the 200-day EMA near $1.354. A break below that level could expose horizontal support at $1.300, followed by the 50-day and 100-day EMAs. The next notable downside target would be around $1.000.

To the upside, XRP faces strong resistance near $1.900. A daily close above that level would be necessary to restore stronger bullish momentum and support a more substantial recovery.

Until such a move occurs, weakening derivatives demand and fading momentum could keep XRP under pressure near its moving-average support zone.