XRP, the native token of Ripple Labs, is currently facing a significant price decline amidst ongoing market uncertainty and bearish price action. The price of XRP has dropped by over 6.8% in the past 24 hours, trading near $2.153. This decline is accompanied by a 7% increase in trading volume, suggesting heightened participation from traders and investors who are concerned about potential further price drops.
One potential reason behind XRP’s price decline is the upcoming unlock of 1 billion tokens, along with the current market sentiment. Additionally, traders seem hesitant to build new positions, as reflected in the 31% drop in XRP’s open interest, indicating the liquidation of traders’ positions in the past 24 hours. This has resulted in the liquidation of $6.84 million worth of XRP long positions out of a total of $7.68 million in overall liquidations, according to on-chain analytics firm Coinglass.
In terms of technical analysis, XRP has failed to hold its crucial support level of $2.20, which it has reached four times since the beginning of December 2024. The failure to maintain this level suggests a potential further price decline towards the next support area. However, there is still a chance for XRP to mitigate the price decline. If it closes a daily candle below the $2.15 level, there is a strong possibility it could drop by 14% and reach the $1.88 mark in the near future. The bearish thesis for XRP will only hold if it closes a daily candle below the $2.15 mark, otherwise, it may be invalidated.
Overall, XRP’s price decline can be attributed to various factors, including the upcoming unlock of 1 billion tokens, a drop in open interest, and bearish price action. The market sentiment is currently uncertain, and traders are cautious about building new positions due to significant volatility. With XRP failing to hold key support levels and facing potential further price declines, investors should closely monitor the situation and be prepared for possible downside risks in the near future.
