• XRP declines to $3.00 as major crypto assets trim midweek gains on Friday.
• The SuperTrend and the RSI technical indicators signal bearish continuation.
• The MACD and Ichimoku Cloud indicators maintain a subtle bullish outlook.

Ripple (XRP) posts losses on Friday, but remains near the $3.00 level, reflecting a decline in retail interest in the broader cryptocurrency market following a minor mid-week uptrend to $3.14 triggered by the United States (US) Federal Reserve’s (Fed) dovish outlook for the fourth quarter.

The central bank signalled the need to revive the cooling labor market, projecting two more rate cuts before year-end in addition to Wednesday’s 25-basis-point interest rate cut.

The dovish gesture revived risk appetite for crypto and other riskier assets. However, the uptrend has been cut short amid a sudden increase in volatility ahead of the weekend.

XRP wobbles as Open Interest steadies 

The XRP derivatives market exhibits a steady uptrend in futures Open Interest (OI), supporting positive sentiment and potentially driving demand for the cross-border money remittance token.

According to CoinGlass data, OI, referring to the notional value of outstanding futures contracts, averaged at $8.96 billion on Friday, up from $7.37 billion posted on September 7. 

XRP Futures Open Interest | Source: CoinGlass

The uptrend in OI suggests that traders are increasingly opening new short positions, with new, fresh capital into the market amplifying downside risks. The subsequent drop in the price of XRP suggests bearish conviction and the potential for the downtrend to continue in the short term.

Technical outlook: XRP faces increased downside risks near $3.00

XRP falls toward the short-term $3.00 support at the time of writing on Friday, reflecting fresh risk-off sentiment in the broader cryptocurrency market. A correction in the Relative Strength Index (RSI) to 52 after topping out at 57 on Wednesday implies fading bullish momentum. A continued drop into the bearish region below the midline would affirm the growing bearish sentiment and increase the chances of XRP sliding below the $3.00 support.

The SuperTrend indicator, positioned above the XRP price on the daily chart, displays a sell signal, suggesting that investors reduce their exposure or focus on increasing short positions. As a measure of market volatility, the SuperTrend serves as a dynamic resistance. Therefore, downside risks could persist as long as the SuperTrend remains above the XRP price.

XRP/USDT daily chart

A break below the $3.00 short-term support could see traders shift their attention to the 50-day Exponential Moving Average (EMA) at $2.95 and the 100-day EMA at $2.83.

Still, the Moving Average Convergence Divergence (MACD) indicator reinforces a subtle bullish grip, maintaining a buy signal since September 8. If traders heed the signal and increase their exposure, an immediate rebound from the $3.00 support could ensue. A recovery from here would boost the chances of XRP testing resistance at $3.35 and the record high of $3.66.

The Ichimoku Cloud on the same daily chart holds below the XRP price, mirroring strong support and a bullish outlook. If XRP continues to hold above the Ichimoku Cloud, serving as a dynamic support, it suggests a bullish trend structure despite the current price drop. This means that XRP’s bullish potential is intact as the Cloud signals there is room for growth.