XRP hammers on $2.00 support as downside risks escalate
Ripple (XRP) is trading above $2.00 at the time of writing on Thursday, weighed down by increasing selling pressure in the broader cryptocurrency market. Short-term technical signals underpin the bearish outlook, which could accelerate the downtrend toward April’s low of $1.61.
Meanwhile, the Federal Reserve (Fed) proceeded with the much-anticipated cut, bringing its benchmark lending rate to a range of 3.50%-3.75% on Wednesday. Despite meeting expectations, the rate cut was accompanied by a cautious tone.
Fed Chair Jerome Powell emphasized upside inflation risks and a slow labor market as factors that could support fewer rate cuts in the coming year, dampening sentiment across the cryptocurrency market.
Retail demand wanes as XRP struggles
A weak derivatives market has persisted since the October 10 flash crash, which liquidated almost $611 million in XRP-related long positions and approximately $90 million in shorts.
Meanwhile, demand for XRP derivatives has stabilized, albeit at significantly lower levels, with futures Open Interest (OI) standing at $3.71 billion on Thursday, down from $8.36 billion on October 10 and from the $10.94 billion reached in July.
OI represents the notional value of outstanding futures contracts. Low OI suggests investors are not convinced XRP can sustain an uptrend in the near term.
Despite macroeconomic uncertainty and a weak derivatives market, XRP spot Exchange Traded Funds (ETFs) posted inflows of $10 million on Wednesday – a slight improvement from $9 million the previous day.
Since their launch on November 13, XRP ETFs have not experienced outflows, with cumulative inflows totaling $954 million and net assets amounting to $940 million.
Source: Fxstreet.com
