XRP price chart eyes 30% drop to $1.50 as open interest tumbles to 8-week lows

XRP printed an asymmetrical triangle on the daily chart, a technical pattern associated with strong trend momentum. Breaking below this technical setup and a drop in XRP futures demand may signal the start of a retreat toward $1.50.

Decreasing OI backs XRP’s downside

XRP (XRP) fell in tandem with the wider crypto market on Feb. 25 after US President Donald Trump emphasized that tariffs on imports from Canada and Mexico are still on as the month-long delay on their implementation nears expiration.

XRP’s price reacted negatively to the news, shedding as much as 22% of its value on Feb. 24 and Feb. 25 to trade at $2.13 at the time of writing. 

The altcoin’s potential to drop lower was backed by decreasing open interest (OI), as per CoinGlass data.

The chart below shows XRP open interest has dropped by 20% from $3.63 billion on Feb. 24 to the current level of around $2.93 billion, levels last seen on Jan. 3.

Historically, significant drops in OI have preceded major drops in XRP price. For example, the current scenario mirrors the XRP price decline when Trump first announced the tariffs in early February, leading to a 43% dip from a high of $3.13 on Jan. 31 to a low of $1.76 on Feb. 3.

Meanwhile, XRP funding rates have flipped negative from 0.0077% on Feb. 24 to  -0.0003% at the time of writing, indicating rising bearish pressure.

Funding rates are fees exchanged between traders in perpetual futures contracts to keep the contract price close to the underlying asset’s spot price.

When funding rates are positive, traders holding long positions pay a fee to traders holding short positions. When the rate is negative, short traders pay long traders.

Additional data from CoinGlass reveals that over $57.6 million long XRP positions have been liquidated over the last 14 hours, against $4.71 million short liquidations. 

When long positions are liquidated, bullish traders are forced to sell their positions. This sudden selling adds downward pressure on the price, accelerating the decline. 

Possible XRP chart breakdown hints at $1.50

The XRP/USD pair looks set to extend the prevailing bearish momentum that has seen it break below a multimonth asymmetrical triangle.

XRP’s price action between Dec. 1, 2024, and Feb. 24 has led to the formation of an asymmetrical triangle pattern on the daily chart, as shown in the figure below.

The price broke below the triangle’s ascending trendline at $2.45 on Feb. 24. It also lost support from the 100-day simple moving average (SMA) at $2.41, signaling the start of a massive downward breakout.

The target is set by the distance between the triangle’s lowest and highest points, which comes to be around $1.50, an approximately 30% downtick from the current price.

Several analysts have also predicted further losses for XRP, citing chart technicals and loss of key support levels as the reasons. 

Crypto analyst Egrag Crypto shared a pessimistic price prediction for XRP, saying that the breakdown of an ascending triangle in the 12-hour timeframe could see XRP price retest the $1.61 zone.

Fellow analyst Kwantxbt said that the support at $2.00 was crucial for XRP as a drop below it would “open the path to $1.80.”

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.