XRP is experiencing a bout of volatility this weekend, hovering around $2.82, as traders brace for potential shifts in US monetary policy. An intraday rally faltered below the $2.90 mark, underscoring the prevailing uncertainty in the market. All eyes are on the Federal Open Market Committee (FOMC) meeting on September 17, where the Fed is expected to announce its interest rate decision. A rate cut could provide a tailwind for risk assets like cryptocurrencies and equities, but until then, expect price swings.
Open Interest Dips, Funding Rates Offer Hope
A key indicator of retail interest, the Open Interest (OI) in XRP futures, has declined significantly, falling from $10.94 billion in July to $7.4 billion. This suggests a weakening conviction in XRP’s near-term recovery, potentially paving the way for a test of the $2.70 support level.
However, a glimmer of hope emerges from the futures market, where the weighted funding rate remains positive at 0.0083%. This indicates that leveraged long positions are still in demand. Should this funding rate continue to climb, it could fuel renewed bullish momentum, potentially pushing XRP above the crucial $3.00 threshold.
Technical Indicators Signal Caution
From a technical standpoint, XRP is currently testing support at $2.80. The Relative Strength Index (RSI) is trending downward, approaching oversold territory, which implies that the bears are gaining the upper hand.
XRP/USDT 4-hour chart
The Moving Average Convergence Divergence (MACD) indicator is hovering around the zero line, reflecting the ongoing battle between buyers and sellers. A bearish crossover of the MACD line could trigger a further decline towards the $2.70 support. Conversely, if the bulls can defend the $2.80 level and break above the 50-period EMA at $2.84, a rally towards $3.00 might be in the cards.
The Bottom Line
XRP is at a critical juncture. Declining retail interest and bearish technical signals suggest potential downside risk, while positive funding rates offer a counter-narrative. The upcoming Fed decision will likely be a pivotal factor in determining XRP’s trajectory in the coming weeks. Traders should proceed with caution, managing risk carefully amid the prevailing volatility.
