XRP’s price trajectory has taken a precarious turn as bearish signals emerge from the derivatives market, casting shadows on its recent recovery. On May 27, XRP stands at $2.31, a robust 45% rebound since its April nadir, though still trailing its January zenith of $3.40 by a significant 31%. This disparity raises eyebrows about its capacity to scale higher peaks.
Bearish Indicators in the Derivatives Market
XRP’s derivatives market paints a less-than-rosy picture, as neutral funding rates and dwindling open interest (OI) signal caution. Neutral funding rates, hovering around 0% since February, imply a stalemate between bullish and bearish sentiments, suggesting a market in stasis. Without a decisive directional push, XRP might languish in price consolidation, devoid of breakout catalysts.
The OI in XRP futures has plummeted to $3.2 billion, marking a 9.6% drop since its mid-May apex. Typically, declining OI reflects a waning enthusiasm that undercuts price ascensions. For XRP, this could precipitate a downward spiral if even slight selling pressure triggers the unwinding of leveraged positions. The absence of fresh capital from institutional or retail investors leaves XRP vulnerable to downward volatility. This sentiment echoes findings in Dogecoin, XRP ETF Hopes Are Fuelling Bullish Sentiment, Social Data Shows, which highlights the fluctuating investor interest in the crypto market.
Institutional Appetite Wanes
Further compounding XRP’s woes is the apparent retreat in institutional interest. CoinShares data highlights a stark $37.2 million weekly outflow from XRP exchange-traded products (ETPs), snapping an 80-week inflow streak. Month-to-date, these outflows total $28.6 million, a stark contrast to the inflows enjoyed by Bitcoin, Ether, and Solana, which have seen net inflows in the billions. This exodus from XRP ETPs underscores a cooling institutional fervor, a bearish signal for XRP’s price.
Chart Patterns and Potential Price Targets
On the technical front, XRP’s four-hour chart reveals a descending triangle pattern—a notorious harbinger of bearish reversals. This formation, marked by a flat support line and descending resistance, suggests a potential 16% tumble if the support at $2.28 falters. A breach below this could drag XRP towards the $1.96 mark by the end of May. For a broader perspective on price movements, see Price predictions 5/2: BTC, ETH, XRP, BNB, SOL, DOGE, ADA, SUI, LINK, AVAX, which provides insights into potential market trends.
Conversely, a successful breach above the triangle’s resistance at $2.35 could negate this bearish setup, paving the way for a rally towards the psychologically significant $3.00 level. Yet, the struggle to maintain a foothold above the 200-day simple moving average at $2.18 hints at the bulls’ waning strength.
In this climate of uncertainty, XRP’s path remains fraught with obstacles. The bearish undertones in the derivatives and institutional markets compound the technical vulnerabilities, raising questions about the sustainability of its rebound. As the market navigates these turbulent waters, the coming weeks will be pivotal in determining whether XRP can defy the odds and chart a bullish course.
Source
This article is based on: Is XRP price going to crash again?
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
