XRP, the native cryptocurrency of the Ripple network, has been encountering resistance just below the $2.50 mark, and despite multiple attempts to break through this level, the cryptocurrency has failed to gain a sustained foothold. As the price remains stuck below this critical barrier, technical indicators and market data suggest that bearish pressure may be building, putting the future of XRP’s price in jeopardy.

XRP Price Consolidates Below Key Resistance

XRP has spent the past few weeks hovering around the $2.37 mark, after being rejected near the $2.50 resistance zone for the third time in two weeks. This resistance level is particularly significant, as it aligns with a dense supply area visible on the price chart. Despite testing higher levels and making several attempts to push past the $2.50 barrier, the bulls have struggled to gain momentum, leading to increased selling pressure at this level.

At the time of writing, XRP was trading slightly above its 50-day moving average (MA) of $2.37, but still well below its 200-day MA of $2.52. This mixed technical setup indicates indecision in the market, with neither buyers nor sellers clearly in control. The Relative Strength Index (RSI) sits at 48.48, which points to a neutral market stance with a slight bearish bias. This suggests that XRP might be in for a period of consolidation, with the risk of a decline if selling pressure increases.

Technical Indicators Signal Potential Downside

A breakdown below the 50-day moving average could expose XRP to further downside risk. The next major support zone is seen around the $2.35–$2.00 range, where psychological support could prevent a sharp drop. If XRP fails to hold these levels, it could see a significant decline, potentially heading towards the $2.00 support area.

The $2.00 level is critical for XRP, as it is a key psychological price point and could act as the last line of defense against a deeper pullback. Should XRP break below this level, it might face even greater selling pressure, pushing the price further down.

Futures Market Activity Shows Weak Sentiment

Adding to the bearish outlook, data from the XRP Futures Open Interest chart suggests that speculative demand is fading. Open Interest in XRP futures peaked at around $5.8 billion in mid-January, but has since dropped to approximately $2.8 billion. This sharp decline indicates that traders are losing confidence in a strong bullish breakout, as speculative interest continues to wane.

This decline in open interest suggests that fewer traders are willing to bet on future price increases, further reinforcing the notion that XRP may struggle to overcome its current resistance. Additionally, stagnant volume trends indicate that recent price movements are being driven more by spot market traders rather than leveraged futures traders, suggesting a lack of conviction in the rally.

What’s Next for XRP?

If XRP cannot hold above the $2.35 level, it could face a deeper retracement toward the $2.00 support zone. On the upside, a daily close above the $2.50 resistance level, accompanied by volume confirmation, would signal a potential reversal of the current bearish trend. In this case, XRP could aim for higher levels in the $2.75–$3.00 range.

However, for this bullish scenario to play out, XRP would need renewed buying strength. Given the current lack of momentum and the weakness in the derivatives market, it seems more likely that the bears could have the upper hand in the short term.

Conclusion

In conclusion, XRP is currently trapped below the critical $2.50 resistance level, with technical indicators and market data suggesting that bearish pressure may be mounting. While a move to the $2.00 support zone is a real possibility if XRP fails to maintain its current levels, a strong breakout above $2.50 could lead to a more bullish scenario. Traders will need to closely monitor key support levels and market sentiment to determine whether the bears will take control or if XRP will manage to break free from its current consolidation phase.