Despite recent signs of recovery across the crypto market in general, sentiment around Ripple (XRP) remains pessimistic. This altcoin continues to struggle below $2.20, as many traders are currently betting that the price will decrease further.
Traders seem skeptical that this token will generate a significant price surge in the near future, and many continue to bet against its potential price increase.
XRP traders predict further declines as sentiment worsens.
According to Coinglass, Short positions targeting XRP are consistently increasing. The Long/Short ratio of this token has remained below 1 for nearly 2 weeks, reflecting a growing interest in Short trades. At the time of writing, this ratio is 0.93.
XRP Long/Short Ratio | Source: Coinglass
The Long/Short ratio of XRP compares the number of Long positions (betting that the price will rise) to Short positions (betting that the price will fall) in a market.
When the Long/Short ratio of an asset is above 1, there are more Long positions than Short positions, indicating that traders are primarily betting on a bullish scenario.
Conversely, when this ratio is below 1, traders are betting on a price decline, as is the case with XRP. The Long/Short ratio has maintained below 1 for several days, highlighting the prevailing pessimistic sentiment in the XRP market, signaling a risk of further decline.
Additionally, the weighted sentiment of XRP remains negative, reaffirming the pessimistic outlook. As of the time of writing, this ratio is -0.4.
Weighted Sentiment of XRP | Source: Santiment
Weighted sentiment analyzes social media and online platforms to assess the general sentiment surrounding an asset.
When the value of such metrics is negative, it indicates rising selling pressure and diminishing investor confidence. This puts XRP at risk of prolonging its downward trend.
Is selling pressure pushing XRP's price below $2?
With Shorts increasing and a strong downward trend, XRP risks sliding below the $2 mark. If the current trajectory continues and selling pressure intensifies, a drop below this psychological threshold could occur in the near future.
In that scenario, the price of XRP could reach $1.99 and drop to a yearly low of $1.61.
XRP Price Analysis | Source: TradingView
However, new demand for Ripple's altcoin could nullify bearish forecasts. In that case, XRP could rise above $2.29 and head towards $2.50.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should do thorough research before making decisions. We are not responsible for your investment decisions.
