The XRP market is at a tipping point. For two weeks in a row, traders have been increasing short positions, and sentiments on social media remain negative.
Let's see if the cryptocurrency can hold above $2 and overcome the negative sentiment.
Traders are expecting a decline in Ripple.
According to Coinglass, short positions dominate the Ripple market. The ratio of long to short positions has remained below one for nearly two weeks, indicating a prevalence of bearish sentiment among traders.
What the position ratio says
The ratio of long to short positions is a key indicator of market sentiment. A value below one indicates that market participants expect a price decline.
The ratio of long to short positions in XRP. Source: Coinglass
The weighted sentiment for XRP, taking into account the tone of discussions on social media and online platforms, also remains negative at -0.40. This figure indicates that selling pressure is increasing, and investors are uncertain about Ripple's short-term dynamics.
Weighted sentiment for XRP. Source: Santiment
It was recently reported that the activity of Ripple whales has sharply increased: millions of tokens were deposited on Binance.
Possible scenarios for XRP
If the current trend persists, XRP could break an important psychological level soon. In this case, the price would sequentially drop to $1.99 and then test the annual low at $1.61. If demand for the altcoin increases, the bearish forecast may not materialize. In that case, the price could break through resistance at $2.29 and aim for $2.50.
XRP price analysis. Source: TradingView
The coming days will determine Ripple's short-term dynamics. The dominance of short positions with a ratio of 0.93 and negative social sentiment (-0.40) creates significant pressure on the price. However, the cryptocurrency market is known for its unpredictability, and an unexpected surge in demand could quickly reverse the current trend.