XRP’s Bearish Breakdown: Death Cross Signals Further Downside — How Far Could It Fall?
XRP has entered a technically precarious phase, with the formation of a death cross on its daily chart amplifying bearish momentum. This ominous chart pattern, which occurs when the 50-day simple moving average (SMA) crosses below the 200-day SMA, often signals a prolonged sell-off and a weakening trend across financial markets — and XRP appears to be no exception.
The token dropped as much as 7% in the past 24 hours, reaching an intraday low of $2.27 before rebounding slightly to $2.32. Despite the minor recovery, XRP remains down nearly 36% from its mid-July peak of $3.65, underscoring the depth of its correction. The broader crypto market’s decline, triggered by Bitcoin’s fall below the $97,000 level — a price not seen since May — has further exacerbated XRP’s downward trajectory.
Investor appetite for risk assets such as XRP has weakened significantly in recent weeks. A surge in U.S. Treasury yields, buoyed by the end of a prolonged government shutdown, has pulled capital away from cryptocurrencies. Rising bond yields typically divert investor interest toward safer, income-generating assets, draining liquidity from volatile instruments like XRP.
Adding to the bearish pressure, derivatives markets reflect dwindling confidence. Data shows that open interest in XRP futures has plunged to $3.63 billion — a stark decline from the $8.36 billion level recorded on October 10. This drop indicates that traders are closing out positions, reducing exposure, and stepping away from the market, all pointing toward a lack of conviction in any immediate recovery.
Further evidence of negative sentiment comes from the long/short ratio, which has dipped to 0.88. This metric suggests that short positions are outpacing long ones, indicating more traders are betting on further depreciation in XRP’s price. Such sentiment in both derivatives and spot markets forms a feedback loop that can entrench bearish momentum.
Looking at the technical landscape, XRP has also been trading within a descending parallel channel since mid-July. This pattern indicates a persistent downward bias, where attempts to rally are consistently met with selling pressure near the upper boundary of the channel. The death cross, combined with this descending structure, paints a bleak short-term outlook unless there’s a significant shift in volume from buyers.
The $2.00 support level now becomes critical. Not only is it a psychological threshold, but it also aligns with the 50% Fibonacci retracement level from XRP’s recent bull run. If this support fails, the next potential floor lies near $1.90 — XRP’s low from June — representing a further 18% slide from current levels.
However, not all is doom and gloom. A potential catalyst for a bullish reversal could be the recently launched XRP spot ETF by Canary Capital. The fund generated an impressive $58 million in trading volume on its first day, signaling robust institutional interest. If momentum continues, it could inject fresh capital into the XRP ecosystem and help break the token out of its downward trajectory.
A breakout above the $2.58–$2.65 resistance range could mark the beginning of a reversal. This zone coincides with the upper boundary of the descending channel and has previously acted as a supply area. A decisive close above it could pave the way for a more sustained rally, potentially bringing XRP back into bullish territory.
Still, for a meaningful recovery to take place, broader market conditions must also improve. Bitcoin’s stabilization above key support levels, a cooling in Treasury yields, and renewed investor risk appetite would all benefit XRP’s outlook.
In the meantime, traders should monitor volume levels closely. A surge in buying volume near the $2.00 mark could signal accumulation by long-term holders or institutions positioning for a rebound. Conversely, a breakdown accompanied by high selling volume might confirm a deeper leg down in the current bearish cycle.
It’s also worth noting that XRP’s price behavior increasingly correlates with macroeconomic variables, including monetary policy, inflation expectations, and bond market dynamics. As such, traders and investors should keep an eye on upcoming economic data releases and Fed communications, which could indirectly impact crypto sentiment.
Moreover, regulatory developments remain a wildcard for XRP. Ongoing legal proceedings and shifts in the regulatory framework for digital assets could either boost or hamper its price. Any resolution in Ripple’s longstanding case with the SEC could create a sharp directional move, depending on the outcome.
In addition, on-chain data shows a decline in active XRP addresses and transaction volume, reinforcing the notion that retail and institutional participation has waned. A revival in network activity could serve as an early indicator of renewed investor interest and the potential bottoming of price action.
In conclusion, XRP stands at a crossroads. With technical indicators pointing to extended bearishness and macro headwinds weighing on sentiment, the path of least resistance remains to the downside. However, a handful of positive catalysts — including ETF inflows, macro relief, and legal clarity — could quickly change the narrative. Until then, the $2.00 support level will be closely watched as the next battleground for bulls and bears alike.