$XRP
Why Is XRP’s Price Down Today? Exploring Liquidations, Funding Rates, and Market Sentiment
XRP has experienced a 4.8% decline over the past 24 hours, bringing its price to $2.29. This downturn reflects a broader pullback in the cryptocurrency market, with the overall market cap shrinking by 6.5% to $3.35 trillion.
1. Liquidation Surge Driving Sell Pressure
In the last 24 hours, XRP's derivatives market saw a staggering $12.92 million in long liquidations, far outpacing the $3.86 million in short liquidations. This imbalance triggered a wave of selling, compounding downward pressure on XRP’s price. Such liquidation spikes have historically led to significant price drops, as seen in December when XRP plummeted by 23%.
2. Negative Funding Rates Reflect Bearish Sentiment
XRP’s funding rates have recently turned negative, dropping from +0.21% to -0.11% per week. This shift indicates a growing preference for short positions, signaling bearish market sentiment. Additionally, open interest fell by $300 million, further highlighting traders' hesitation and contributing to reduced demand for XRP.
3. Long-Term Holders Take Profits
Since reaching a local high of $2.50 on January 4, XRP has dropped by 10%. This price action is accompanied by a notable spike in the Dormant Circulation Supply metric, with 208.3 million XRP (worth $467 million) moved by long-term holders. These transfers into circulation have added selling pressure, further driving down the price.
4. Key Support Levels Under Scrutiny
XRP’s current correction is aligning with a descending parallel channel. Resistance at $2.45 remains intact, and if XRP fails to break this level and turn it into support, it could test the 50-day simple moving average (SMA) at $2.15. A dip below this could open the door to further declines, potentially pushing XRP toward the $2.00 mark. The RSI of 53 suggests the market is consolidating, with potential for either a bullish or bearish move.