XRP Price Eyes $2 as Bearish Pattern Breaks Down, Open Interest Plummets

Bearish Pattern Signals a Deeper Pullback

XRP is under increasing downside pressure as a classic bearish chart formation — the head-and-shoulders (H&S) pattern — appears to have been confirmed. The formation emerged on XRP’s four-hour chart between May 9 and May 19 and was validated when the price broke below the neckline support level around $2.33.

Technical analysts view the head-and-shoulders pattern as a trend reversal indicator, typically suggesting that bullish momentum is weakening and a downward correction may be underway. With the neckline breached, XRP now risks further losses toward key technical support levels.

XRP/USD four-hour chart. Source: TradingView

Price Targets: $2.25 and Then $2.00

If XRP remains below the neckline at $2.33, it could slide first toward $2.25, where the 200-day simple moving average (SMA) currently offers a potential support level. A failure to hold this level would open the door to a full breakdown toward the pattern’s measured target of $2.00, representing a 14% drop from current prices.

According to market analyst Egrag Crypto, the $2.30 level is critical. If the price fails to reclaim that support, a broader sell-off could be triggered, potentially dragging XRP down to $2.15, or even further to $1.60, based on historical price zones and liquidation levels.

Open Interest Drops $1 Billion in 5 Days

Another key indicator reflecting growing bearish sentiment is the sharp decline in XRP futures open interest (OI) — the total value of outstanding futures contracts. Over the past five days, OI has dropped 18%, falling from $5.49 billion to $4.49 billion, suggesting that trader confidence and market liquidity are weakening.

Source: Egrag Crypto

This drop in open interest aligns with increasing liquidations. In the past 24 hours alone, $12 million worth of long positions were forcibly closed, compared to only $1.4 million in shorts. Such a liquidation imbalance further indicates a shift in sentiment from bullish to bearish, with traders exiting leveraged bets at a loss.

Rising Volume Supports Bearish Case

Notably, XRP’s price decline over the past 24 hours — a 3% dip — has been accompanied by a 70% surge in daily trading volume, which now stands at over $4.1 billion. Rising volume during a downtrend is often interpreted as confirmation of increasing bearish momentum, as more participants actively reposition or sell.

XRP futures open interest. Source: CoinGlass

Outlook: XRP at a Critical Juncture

XRP’s next few moves could define its short-term trajectory. Holding above $2.30 could help bulls stabilize the price and regain control. However, continued weakness below that level, especially with falling open interest and increasing liquidation pressure, could drag the token down to the psychological $2 mark — or even lower.

Total XRP liquidations across all exchanges. Source: CoinGlass

Investors and traders should watch key support zones and market sentiment indicators closely in the days ahead.