- The XRP price has dipped below the vital $0.6 support level, forming a critical triangle pattern.
- There are concerns that the U.S. Securities and Exchange Commission (SEC) may appeal the recent verdict on Ripple’s On-Demand Liquidity (ODL) sales, which could exacerbate bearish sentiment.
- Notably, the XRP Open Interest (OI)-Weighted Funding Rate is at -0.0085, suggesting traders are incurring costs to maintain short positions.
XRP’s recent price action brings significant concerns as it drops below the $0.6 threshold, hinting at further bearish trends.
XRP Price Drops Below Key Support Level Amid Bearish Patterns
The XRP token faced considerable selling pressure, causing its price to decline by 2.62% to $0.56 recently. This fall marked a significant pivot within a multi-year triangle pattern, hinting at the potential for substantial downward movement. As XRP reverses from a multi-year resistance level, market analysts suggest up to a 30% downside risk.
Possible SEC Appeal and Its Implications for Ripple
Following the court’s final verdict imposing a $12.5 million penalty on Ripple, discussions have emerged about a possible SEC appeal. Attorney Jeremy Hogan notes that an appeal primarily targeting Ripple’s ODL sales may have minimal impact. He emphasizes that most ODL sales occur outside U.S. jurisdiction, reducing the potential consequences of the appeal.
Market Reactions and Negative Funding Rates
With XRP’s current price reversing from $0.64 to $0.56, the market capitalization has also dropped significantly to $31.9 billion. The formation of the triangle pattern since September 2021 continues to create tension among investors. According to Coinglass, the negative Open Interest (OI)-Weighted Funding Rate of -0.0085 indicates that short sellers are incurring costs to hold their positions, driving further bearish sentiment.
Looking Ahead: Key Support Levels and Potential Rebounds
If selling pressure persists, XRP might breach the combined support of $0.55 and the 200-day EMA, potentially descending to the psychological $0.4 level. This $0.4 level, a significant accumulation zone, could attract dip buyers. Should the price find support here, a rebound might spearhead a new recovery phase.
Conclusion
The recent price action in XRP reflects heightened bearish sentiment exacerbated by potential SEC appeals and negative funding rates. However, the critical support at $0.4 offers a glimmer of hope for a potential recovery. Investors should stay vigilant, tracking the SEC’s moves and market trends to gauge future price actions.
