Ripple (XRP) price is under bearish pressure after shedding more than 8% of its value in the past week and recording the biggest seven-day loss among the top-ten largest cryptos by market cap. As the downward pressure intensifies, Ripple will likely lose its competitive edge over the largest altcoin, Ethereum, after the XRP/ETH ratio plunged to its lowest level in a month.
XRP Sheds $520M in Open Interest as Long Liquidations Surge
Data from Coinglass shows that Ripple’s open interest has declined from $4.15 billion to $3.63 billion in just one week, shedding more than $520 million. This drastic decline follows a surge in long liquidations with more than $8M positions by long buyers being forcefully closed in the last 24 hours as the XRP price declined.
The declining OI may prevent an explosive Ripple rally as it indicates that futures traders are no longer willing to open new positions, amid the closure of existing ones due to price volatility. Nevertheless, the level of leverage remains notably high, with more than 75% of Binance traders opening long positions, causing the long/short ratio to reach its highest level in a month.
While the opening of new long positions shows that many traders anticipate the XRP price to recover, an unprecedented downtrend will trigger liquidations that will push the Ripple price lower as those with open positions sell.
XRP/ETH Falls to Monthly Low
XRP price has been underperforming against other top altcoins, especially Ethereum. The XRP/ETH ratio has plunged to its lowest level in one month, and this suggests that while Ripple is shedding gains, Ethereum has successfully defended its support level and will likely continue dominating the altcoin market.
This ratio now stands at 0.00118, and if the price of XRP continues with the downward trend, and loses the next support at 0.00111, it will trigger the next bearish leg to 0.00102. Meanwhile, the RSI is showing that the bearish momentum is intensifying, indicating that Ripple is facing further correction against ETH.
XRP Price Eyes Drop Below $2 Before Recovery
XRP price will likely drop below $2 first before it can make an upward recovery, according to the analysis shared by trader CrediBULL Crypto. $2 has often been seen as a crucial psychological support for the altcoin, but a drop below it might spark a surge in buying activity by traders accumulating the dip, and this will likely support an upswing.
If Ripple drops to test the support level at $1.79, it may drive the next upward momentum that will aid a break of the critical $2.10 resistance level. Fliupping this level will then pave the way for an XRP breakout to $4.
To sum up, the price of XRP has been under intense selling pressure due to a surge in long liquidations that have also caused the open interest to drop by over $500 billion in a week. As these bearish headwinds continue, Ripple is losing its edge against Ethereum, with a breakout only possible if it drops to test support below $2 before resuming an upward trend.
The post XRP Price Forecast: Ripple’s Open Interest Sheds $520M as XRP/ETH Hits One-Month Low appeared first on CoinGape.
