XRP traders remain cautious: Why is the price down today?

XRP traders remain cautious, ignoring ETF filings and other positive developments amid macroeconomic uncertainty.

XRP price has dropped by 7.80% in the last 24 hours to reach around $2.30 on Feb. 7, mirroring declines in the broader crypto market, News.Az reports citing Coin Telegraph

What to know:

• XRP’s ongoing plunge is part of a consolidation move following Feb. 3’s global market rout.

• Nearly $152.35 million worth of XRP futures positions have been liquidated ever since, with long liquidations amounting to $106.70 million.

• XRP technicals hint at further declines in the coming weeks.

US jobs data spoils XRP’s upside bias

The XRP sell-off comes amid a stronger-than-expected forecast for US job growth in January, reinforcing expectations that the Federal Reserve may delay interest rate cuts.

What to know:

• Prediction markets estimate 238,000 jobs were added in January, significantly above Wall Street’s median forecast of 169,000.

“There’s a 28% chance that over 300,000 jobs were added in January,” notes trading resource The Kobeissi Letter on the upcoming US payrolls data on Feb. 7.

• A resilient labor market reduces the urgency for the Federal Reserve to cut interest rates, keeping borrowing costs elevated.

• A stronger US economy typically supports the dollar, making risk assets like XRP less attractive to investors.

• The chances of a modest 0.25% rate cut at the Fed’s March meeting stand at just 14.5% compared to 36.1% a month ago.

Crypto traders “fear” amid positive XRP developments

The crypto market sentiment has shifted from “greed” to '“fear” following the Feb. 3 crash, triggered by President Trump’s trade war escalation.

XRP is facing the heat because of it, with its traders ignoring even a flurry of optimistic updates, including the latest ETF filings in the US.

Key takeaways:

• Cboe, a Chicago-based exchange, has filed applications with the SEC to list spot XRP ETFs from WisdomTree, Bitwise, 21Shares, and Canary.

• The trial lawyer who signed the SEC’s lawsuit against Ripple has officially resigned, leading an analyst to say that the SEC vs. Ripple case is “basically over.“

• Most traders shrugged off the positive developments, with XRP sliding over 18% in the past week.

• Market analyst Johnny Woo notes that altcoins like XRP are in a correction phase, with traders already pricing in the news.

• As of Feb. 7, the XRP price has been up 375% since Trump won the US presidential election in November.

XRP open interest drops over 50%

XRP is struggling as derivatives traders unwind their positions. Open interest has plummeted, and futures liquidations have piled up, indicating a loss of speculative momentum.

Key notes:

• XRP’s open interest (OI) has dropped 55% in the past three weeks, signaling a decline in trader participation.

• XRP futures liquidations hit $152.35 million since Feb. 3, with long traders accounting for $106.70 million, amplifying sell pressure.

• The funding rate remains positive at 0.0024% but is far below its December peak of 0.0966%, suggesting a weaker bullish conviction.

• The sharp drop in open interest and high long liquidations suggest that leveraged traders are exiting their positions, triggering forced selling.

XRP tests critical bullish continuation pattern

XRP price is falling as traders reassess its breakout strength, with the token retesting a critical support level after failing to sustain momentum.

• XRP’s decline appears to be a technical retest of the upper boundary of its previous symmetrical triangle — a common occurrence where the price revisits a breakout level to confirm its strength.

• If XRP holds above this key support, it could validate the breakout and set the stage for a move toward the $4 price target based on the triangle’s measured move.

• A failure to hold above the upper trendline could see XRP slide further toward the 50-day EMA ($2.59) and the 200-day EMA ($1.63), both of which serve as critical dynamic support levels.

News.Az