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XRP (XRP) price has recovered from its low of $1.89 reached on March 11, but it’s still trading below a key resistance zone. Will XRP’s price sustain the recovery or drop further in the coming days?

XRP/USD daily chart. Source: Cointelegraph/TradingView

XRP funding rates show bearish sentiment 

One of the clearest signs that there is more trouble ahead for XRP is the presence of negative funding rates and decreasing open interest (OI) in its futures markets.

Related: XRP’s role in US Digital Asset Stockpile raises questions on token utility — Does it belong?

Key points:

• Funding rates are periodic payments made between long and short traders in perpetual futures contracts to keep prices aligned with the spot market.

• When this metric turns negative, it means short sellers are paying longs, indicating that bearish sentiment dominates.

• XRP funding rates are hovering below 0%, indicating bearish sentiment dominates the market.

XRP perpetual futures funding rates across all exchanges. Source: Glassnode

• Negative funding rates discourage new buyers from entering the market, as holding long positions becomes less profitable.

• If this trend persists, XRP could face a sharp decline as market confidence erodes further.

• Similarly, XRP’s OI in the futures market has dropped from its local peak of $5.67 billion on Jan. 17 to $2.4 billion as of March 18.

• OI measures the total number of outstanding futures contracts, and a decrease suggests traders are exiting positions.

XRP futures open interest. Source: Glassnode

• Historically, assets with declining open interest struggle to maintain upward momentum, as capital leaves the market. 

• For XRP, this could mean that even minor selling pressure might trigger a cascade of liquidations, especially if leveraged positions are forced to close. 

• Without renewed interest from institutional or retail traders, XRP’s price more downside.

XRP’s market structure hints at a retest of $1.90

XRP’s price action on the four-hour candle chart has painted an inverted V-shaped pattern, as shown in the chart below. 

Key takeaways:

• An inverted V-shaped chart pattern occurs when the price of an asset rises rapidly to a peak in a steep, near-vertical ascent and then falls just as abruptly, forming a shape that resembles an upside-down "V." 

• This indicates that the buying pressure has become exhausted.

• The supplier congestion zone between $2.35 and $2.42 is acting as an area of stiff overhead resistance. This is also where the 100-period simple moving average (SMA) and 200 SMA currently sit.

• The relative strength index (RSI) has dropped below the 50 mark, asserting the sellers’ dominance in the market. 

• The bears will now attempt to break the support zone between $2.28, i.e. the 50 SMA, and $2.20.

• Losing this level would see XRP price drop toward the neckline of the prevailing chart pattern at $2.01. 

• A close below this level would confirm the continuation of the downtrend, with the next logical move being the zone between the Feb. 28 low of $1.94 and the range low at $1.89, reached on March 11.

XRP/USD four-hour chart. Source: Cointelegraph/TradingView

• The bulls must hold above the 50 SMA to stop the downtrend from continuing. 

• This will increase the chances for XRP to break above the $2.35 and $2.42 supply zone and later to the pattern’s high at $2.47, invalidating the bearish outlook. 

Popular crypto analyst Dark Defender remains optimistic about XRP’s ability to recover from the downtrend and enter price discovery.

“The primary correction on the weekly, daily frame and 4-hour structure is over for XRP,” the analyst said in a March 17 post on X. 

Although there will be more “minor ups and downs” along the way, he added, the altcoin has “started Wave 1 with an aim of $5.85.”

Key levels to watch for Dark Defender are support at $2.22 as support and resistance at $3.39.

“The upcoming weeks will be fantastic.”

XRP/USD daily chart. Source: Dark Defender

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.

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