XRP Price Struggles as Bearish Momentum Builds

XRP has faced a significant decline in recent trading sessions, with its price dropping by approximately 3.8% over the past 24 hours. As of March 27, XRP is trading at $2.35, after a sharp pullback from earlier highs. The market's cautious sentiment is compounded by a 27.5% spike in trading volume to $3.37 billion, indicating heightened sell-side activity.

Despite a major legal victory for Ripple last week — where CEO Brad Garlinghouse announced that the SEC would drop its appeal in a critical case regarding XRP's status as a security — XRP’s price has failed to rally significantly. Many expected the positive news to fuel a price surge, but the cryptocurrency has struggled to maintain upward momentum.

Low Open Interest and Negative Funding Rates Signal Waning Confidence

XRP’s technical indicators reflect a lack of enthusiasm from traders, particularly in the derivatives market. Open Interest (OI), which measures the total number of outstanding futures and options contracts, remains subdued, signaling reduced market activity. Currently sitting at $3.82 billion, OI is 52% lower than its peak of $7.8 billion seen on January 18, further decreasing by 5% in the last 24 hours. This drop in open interest suggests that less capital is entering the market, exacerbating the pressure on XRP’s price.

Additionally, negative funding rates in the XRP perpetual futures market suggest bearish sentiment. On March 27, funding rates flipped negative, from 0.0088% to -0.0049%, indicating that shorts (those betting against the price) are now paying longs (those betting on the price rising) to keep their positions open. This bearish trend could lead to more selling pressure if buyers do not step in to reverse the momentum.

Bear Flag Pattern and Key Support Levels to Watch

XRP’s price action has also confirmed a bear flag pattern on the daily chart, signaling the possibility of further downside. After closing below the key $2.45 mark, XRP is now testing the important support level at $2.30. If the price fails to hold this level, it could see a move toward the $2.22 range low from March 18 or even the flag’s base at $2.00.

A break below these support levels would indicate a deeper correction, with analysts predicting that XRP could dip as low as $1.60 — a 31% decline from its current price. The Relative Strength Index (RSI), which dropped from 62 to 49 over the past three weeks, further suggests increasing bearish momentum.

Potential for a Major Correction

Veteran trader Peter Brandt has pointed out that XRP is forming a textbook head-and-shoulders pattern on its daily chart, which could project a 50% drop, bringing the price down to $1.07. Brandt noted that a rally above $3.00 would invalidate this bearish pattern, but if XRP falls below $1.90, it could trigger the downside scenario, leading to a potential 55% correction.

What's Next for XRP?

The current price action and technical indicators suggest that XRP could face further declines unless a significant shift in market sentiment occurs. With low open interest, negative funding rates, and the confirmation of a bear flag pattern, the path of least resistance appears to be downward. Investors and traders should watch key support levels closely, as a failure to hold these levels could lead to a sharper correction.

As the market reacts to the SEC case resolution, it remains to be seen whether a more favorable legal environment can provide enough momentum to break XRP free from its current downward trend.

For the latest updates on XRP price movements, market sentiment, and potential investment opportunities, be sure to follow Ripple's Official Website