Key points:
Bearish signals from declining open interest and negative funding rates suggest a potential deeper correction for XRP price.
XRP’s descending triangle pattern targets $1.18.
Binance XRP/USDT liquidation heatmap highlights $1.75-$1.60 as the next major liquidity zone.
XRP price has dropped by 12.6% over the last five days and was trading for as low as $1.91 on June 22.
Let’s examine whether XRP’s price could drop further in the coming days.
XRP derivatives data leans bearish
XRP’s potential to drop lower is reinforced by decreasing open interest (OI), as per data from CoinGlass.
Related: XRP price rally’s biggest earners are selling $68.5M tokens every day
The chart below shows that XRP’s OI has declined by 36% to $3.54 billion on June 23 from $5.53 billion on May 14, suggesting that investors are closing positions, possibly expecting the XRP price to go lower.
Historically, assets with declining open interest struggle to maintain upward momentum, as there’s less capital and enthusiasm to drive prices higher. The current scenario mirrors the 74% drop in OI between Jan. 20 and Feb. 8, which accompanied a 32% price drop to $2.26 from a multi-year high of $3.40 over the same period.
Meanwhile, XRP funding rates have flipped negative to -0.0068% on June 23 from 0.0057% on June 22, indicating increasing bets on the price to go lower.
XRP descending triangle hints at a 41% price drop
XRP’s price action has been forming a descending triangle pattern on its daily chart since its late 2024 rally, characterized by a flat support level and a downward-sloping resistance line.
A descending triangle chart pattern that forms after a strong uptrend is seen as a bearish reversal indicator. The setup resolves when the price breaks below the flat support level and falls by as much as the triangle’s maximum height.
The bulls are struggling to keep XRP above the triangle’s support line at $2.00, signaling a lack of strength. A breakdown of this level will see XRP price fall toward the downside target of the prevailing chart pattern at around $1.18, down 41% from current price levels.
XRP’s descending triangle target echoes a previous analysis, which warned of a possible decline to as low as $1.20 if the support at $2.00 doesn’t hold.
Conversely, a clear breakout above the triangle’s resistance line at $2.22 (where the 50-day and 100-day simple moving averages appear to converge) will invalidate the bearish structures altogether, positioning the price for a rally toward $3.00.
XRP liquidation heatmap hits at $1.75-$1.60
The Binance XRP/USDT liquidation heatmap reveals key liquidity zones where large liquidation events may occur. These levels often act as magnets, influencing price direction based on the amount of liquidity at a given level.
A high concentration of liquidations is visible near $1.75, with the yellow area indicating a cluster of leveraged positions, suggesting that it’s a significant support level.
If the $1.75 level is broken, it could spark a liquidation squeeze, forcing long buyers to close positions and driving prices toward $1.60, the next major liquidity cluster.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.