Key takeaways:
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Ripple’s decision to discontinue its quarterly market report is creating uncertainty, leading to a decline in XRP’s price.
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The decrease in open interest for XRP futures reflects weak trader confidence.
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Technical indicators suggest a downturn in XRP’s price, with resistance now noted at $2.27.
XRP (XRP) has experienced a notable drop, falling by 3% in the last 24 hours to trade at approximately $2.09. The trading volume surged by 25% during the same timeframe, amounting to around $2.5 billion, which seems to encourage bearish momentum.
This article will delve into the factors contributing to the current decline in XRP’s price.
Ripple’s Discontinuation of Quarterly Reports
On May 5, Ripple announced its decision to cease the publication of its quarterly XRP markets report, a practice it had upheld since 2017. The rationale provided by the company points to the reports not meeting expectations while also highlighting a shift in focus towards institutional adoption, which demands more in-depth insights.
This announcement has triggered concerns among investors who valued the transparency these reports provided concerning XRP’s market dynamics, including sales data, escrow activities, and trends in institutional adoption.
Market participants are left to ponder whether this strategic pivot indicates a decrease in transparency aimed at appeasing institutional investors.
As shared by user Shanaka Anslem Perera on X, “Is investor confidence going down the drain?” while another user, Moonchaser, remarked that the change may well be indicative of a larger strategy focused on infrastructure and rapid scaling within the expanding Web3 landscape.
“The shift is strategic. XRP’s future goes beyond any one company – it’s about the entire ecosystem. Decentralisation is key.”
Reduction in Open Interest Reflects Weak XRP Sentiment
The open interest (OI) in XRP has fallen by 10% to $3.6 billion within the past week. This decline signifies waning confidence among traders and a drop in market liquidity, both detrimental factors impacting prices.
The price drop has also triggered liquidations in long positions on the last trading day, with approximately $7.98 million in long positions closed compared to just $660,000 in shorts, indicating heightened selling pressure that’s driving prices down.
A long/short ratio of 0.9131 suggests that bullish sentiment may be diminishing.
XRP Price in a Downtrend
The price of XRP currently remains constrained within a descending triangle pattern, with the multi-month downtrend line acting as resistance and $2.00 serving as crucial support, reflecting a weakening technical landscape.
The relative strength index (RSI) has also dropped from 60 to 43 since April 28, indicating growing bearish momentum which may accelerate if the bears push the price below the stable support at $2.00. The XRP/USDT could potentially decline towards the technical target of $1.92.
Conversely, a break and close above the resistance line could empower bullish traders, leading to a retest of the $2.34 resistance level, which aligns with the 100-day SMA, followed by moves toward $3.00 where selling pressure is anticipated to return.
This article does not provide investment advice or recommendations. Every investment and trading action involves risk, and readers are encouraged to perform their own research before making financial decisions.
