XRP eyes $2.6 despite risk-off sentiment: check forecast

The crypto market has had a breather in the last 24 hours following a poor start to the week.

Bitcoin reclaimed the $110k level earlier today, while altcoins are currently trading in the green. Ripple’s XRP is trading above $2.40 despite dropping below $2.30 on Wednesday. 

XRP’s risk-off sentiment persists 

XRP is up by 1% in the last 24 hours and is now trading above $2.40. The positive performance comes as the XRP derivatives market gained stability over the last few days.

Data obtained from Coinglass revealed that the XRP futures Open Interest (OI) averaged $3.76 billion, down from approximately $8.36 billion on October 10. However, pressure remains in the spot market.

Sentiment in the broader crypto market had declined since the largest liquidation event wiped out $19 billion in digital assets on October 10. 

XRP’s OI hit an all-time high of $10.94 billion days after the price reached a multi-year high of $3.66 on July 18. The OI has declined since then as retail demand for the cryptocurrency has also dropped drastically.

Furthermore, the OI-weighted funding rate of -0.0007% suggests that traders are opening short positions as they bet against XRP’s price rising higher in the near term. 

However, XRP exchange reserves on Binance have fallen by 3.36% since the start of the month, averaging 3.45 billion tokens.

The decline suggests that investors are optimistic that XRP’s price will recover in the short to medium term. 

By moving their assets to self-custody wallets, investors are willing to hold XRP longer, reducing the available supply in the open market and improving the coin’s bullish outlook. 

XRP could soar above $2.6 despite short positions from traders 

XRP is trading above $2.40 at the moment, but the XRP/USD 4-hour chart remains bearish and inefficient.

The 4-hour chart presents a bearish picture, as evidenced by the downward-trending Relative Strength Index (RSI) at 49.

However, the technical indicators are improving, suggesting that buyers are slowly regaining control of the market.

The MACD lines are also about to crossover into the positive territory, indicating a rising bullish bias. 

The Money Flow Index (MFI), tracking the amount of money entering or leaving XRP, has been stable over the last few days, but could enter the bullish region soon.

Traders are currently looking out for a recovery above the $2.60 resistance level to validate growing interest in XRP.

If the recovery continues, XRP could surge past the $2.6 resistance level over the next few hours or days. An extended rally is currently not on the cards as the broader crypto market remains volatile.

Key milestones above the $2.6 resistance remain the 200-day Exponential Moving Average (EMA) at $2.70 and the 50-day EMA at $2.71.

However, if the bearish trend continues, XRP could drop below the Friday low of $2.19 and retest the October 10 swing low of $1.78.

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