XRP's price has taken a hit amid the recent market downturn that kicked off in February. The fourth-largest cryptocurrency, XRP, has witnessed a 10% decrease in its value over the last week, now sitting at $2.30.
The downward trend has fueled bearish sentiments, prompting XRP futures traders to increase their short positions in anticipation of any potential recovery.
Facing Strong Selling Pressure in the Bearish Market
The continuous dip in XRP's price has further solidified the bearish sentiment among its future traders. On-chain data points to this negativity, with XRP's long/short ratio revealing that more traders are leaning towards expecting a downward trend rather than a bounce back this week, standing at 0.99 at the moment.
The long/short ratio of an asset compares the number of long positions (betting on price increase) to short positions (betting on price decrease) in the market. A ratio above 1 indicates more long positions, signaling optimism for price growth.
Conversely, XRP's ratio below 1 signifies a bearish sentiment, with traders anticipating a price decline. This paves the way for further downside in the market.
Additionally, XRP's negative weighted sentiment reinforces this bearish bias, currently sitting at -0.66.
Weighted sentiment gauges an asset's overall positive or negative sentiment based on social media mentions and their tone. A negative sentiment, as seen with XRP, hints at a bearish outlook, fueling skepticism among investors and contributing to the price drop.
XRP Nearing Crucial Support Levels
Following its peak at $3.40 on January 16, XRP has been moving within a descending triangle pattern. This pattern, characterized by lower highs and a strong support level, suggests a trendline with a downward slope converging with a horizontal base.
The descending triangle pattern points towards sellers taking control, with a potential breakdown below support indicating further declines. Currently priced at $2.30, XRP is flirting with the support level at $2.27.
A breach of this level could push XRP's price down to $2.13, and further selling pressure might drive its value towards $1.47.
XRP's Fate Hangs on Market Sentiment
In a scenario where market sentiment turns bullish, there might be a surge in XRP's demand, leading to a potential breakout above the descending triangle and a rise to $2.81.