-
A potential reason for the XRP price decline is the upcoming unlock of 1 billion tokens.
-
XRP open interest fell 31%, hinting at liquidation of traders’ positions.
-
XRP could fall 14% to $1.88 if it closes the daily candle below $2.15.
Amid continued uncertainty in the market, XRP, Ripple Labs’ native token, is poised for a noticeable price decline after forming a bearish price move. Apart from XRP, the entire cryptocurrency market seems to be struggling to gain traction and is facing significant price declines.
Current XRP price dynamics
At press time, XRP is trading around $2,153 and has fallen over 6.8% in the past 24 hours. Over the same period, trading volume jumped 7%, reflecting increased participation by traders and investors and raising concerns about potential price declines.
Why is the price of XRP falling?
However, a potential reason for the decline in XRP prices is the upcoming unlocking of 1 billion tokens, as reported by CoinPedia, as well as the current market sentiment.
Drop in open interest
In addition, traders seem hesitant to create new positions, possibly due to significant volatility in the market. According to Coinglass, open interest in XRP fell 31%, hinting at traders liquidating positions over the past 24 hours.
Liquidation of traders in long positions
According to analytics firm Coinglass, this price decline resulted in the liquidation of $6.84 million worth of long XRP positions out of a total of $7.68 million in liquidations.
XRP Technical Analysis and Upcoming Level
Amid this bearish outlook, XRP failed to hold the crucial $2.20 support level. Since the beginning of December 2024, the price has reached this level four times, each time demonstrating upward momentum. However, XRP has now failed to hold at this level and appears to be falling towards the next support area.
However, XRP still has a chance to cushion the price decline. Based on recent price action and historical momentum, if the altcoin closes the daily candle below the $2.15 level, there is a strong possibility that it could fall 14% to reach $1.88 in the near future.
A bearish XRP thesis will only be valid if it closes the daily candle below the $2.15 mark, otherwise it may be invalidated.
