The price of XRP has been bearish throughout December, with key support zones failing to hold due to mounting selling pressure. While the altcoin is hovering around the $1.80 price level, a recent on-chain assessment shows that the price of XRP could be in an uncertain situation.
Bearish divergence is materializing between RSI and XRP price
In a quicktake post on the CryptoQuant platform, market analyst CryptoOnchain highlighted that there is a convergence of technical and on-chain events, revealing an inevitable phase of XRP price decline.
Related reading
The analyst first pointed out that the price of XRP paints a disturbing picture on the weekly chart, basing this hypothesis on the technical context. While the price of XRP is hovering near recent highs, indicating intentions to recover from previous levels, its momentum tells the opposite story.
CryptoOnchain explained that there has been a bearish divergence between the Relative Strength Index (RSI) and the price of XRP. So, as the XRP price seems to be targeting recent highs, the RSI has started a clear decline, gradually making lower highs.
Usually, this type of divergence indicates weakening buying power and diminishing momentum. Interestingly, historical data reveals that this pattern often preceded significant price corrections.
At the same time, XRP price retests the psychological and technical key level at $1.80. The market quant explained that if $1.80 doesn’t hold, the altcoin could quickly see the start of an unbridled decline.
Looking at the broader technical context, it becomes apparent that any meaningful attempt to increase depends on improving momentum.
Open interest in Binance Cascade drops to a new low
CryptoOnchain also cites shocking developments beneath the surface. The relevant indicator here is Open Interest, which tracks the total value of all outstanding XRP derivative contracts (on Binance) that have yet to be closed, settled or liquidated at a given point in time.
Open interest in XRP recently fell to just $450 million, the lowest level since November 2024. A sharp drop in open interest usually indicates that there has been a significant outflow of financial capital from the futures market.
Related reading
This kind of uncontrolled decline suggests that XRP traders are either violently exiting the market or exiting their positions out of fear. Moreover, the decline in open interest alongside weakening price momentum paints a narrative of investor interest; it shows that market participants are pulling back due to a lack of conviction, rather than positioning themselves for a continuation to the upside.
As these signals converge and reveal a strong bearish scenario for XRP, market participants are advised to proceed with caution, as a drop in the key $1.80 level could spell serious trouble for the token’s price. At the time of writing, XRP is valued at approximately $1.87, with a price jump of 1.5% in the last 24 hours.
Featured image from iStock, chart from TradingView
About the Author
