XRP has shown signs of recovery since its recent dip to $1.61 on April 7, climbing back to trade near $1.99. However, this rebound appears fragile as the altcoin remains trapped below a crucial resistance zone at $2.20. The inability to reclaim this level signals a bearish undertone that could spell further downside in the near term.

One of the clearest signs pointing to weakness is the persistently negative funding rates in XRP’s perpetual futures contracts. Funding rates represent periodic payments between traders to maintain alignment with the spot market. When funding turns negative, it means short traders are paying long traders, typically a sign that bearish sentiment is in control. XRP’s funding rates have remained below 0% since early February, suggesting that the majority of traders expect prices to fall.

Adding to the pressure is the declining open interest (OI) in XRP futures, which has plunged from $7.87 billion on January 17 to just $3.06 billion as of April 10. Open interest reflects the total number of active contracts in the market. A drop in OI signals that traders are exiting their positions, often due to uncertainty or a lack of conviction. This declining interest can limit price momentum, as reduced capital inflows mean fewer forces are available to support upward movement.

Historical patterns show that assets with falling open interest and negative funding rates often struggle to sustain rallies. For XRP, this could lead to a situation where even slight selling pressure triggers cascading liquidations, especially if highly leveraged positions are forced to unwind. Without renewed buying interest from retail or institutional participants, XRP risks slipping back into a prolonged downtrend.

XRP’s recent attempt to break out on April 9, when it surged by 21.5%, was met with strong resistance around the $2.20 level. This price area has now rejected the altcoin twice—on April 5 and again on April 9—making it a clear barrier that must be overcome for any bullish continuation. Currently, XRP remains below both the 50-day and 100-day simple moving averages (SMA), indicating weak technical momentum.

On the weekly chart, XRP is clinging to support at $1.86, where the 200-day SMA is acting as a critical defense line. A close below this level would open the door for a retest of the recent low at $1.61, with further downside possible toward $1.07—a level that veteran trader Peter Brandt previously flagged as a potential target.

On the flip side, any chance of a sustained recovery depends on a breakout above the $2.20 resistance, followed by a move above the 50-day SMA at $2.28, ideally supported by strong trading volume. Until then, the Relative Strength Index (RSI) continues to hover below the midpoint, reinforcing the notion that bearish conditions still dominate the market.

In summary, XRP’s current price action, combined with bearish futures market data and repeated failure to break resistance, suggests that a further decline remains a real possibility unless the token can demand and decisively reclaim higher ground. The lack of institutional inflow, compounded by weakening technical indicators like the downward-sloping RSI and persistent trading below major moving averages, reflects a market lacking confidence. Additionally, broader market uncertainty, regulatory developments surrounding Ripple, and macroeconomic factors—such as interest rate expectations and U.S. dollar strength—continue to weigh on sentiment. For XRP to reverse its bearish trajectory, it will not only need to overcome key resistance levels, but also attract sustained volume, regain positive funding rates, and see a rise in open interest that confirms growing trader participation and conviction. Until these conditions align, XRP remains vulnerable to deeper corrections.