• XRP falls for four consecutive days as a bearish wave weighs on the broader cryptocurrency market.
• The cross-border remittance token's supply in profit holds near its one-year low amid risk-off sentiment.
• XRP retail demand steadies, with the futures Open Interest rising slightly to $3.78 billion.

Ripple (XRP) edges lower, trading above $2.25 at the time of writing on Friday. The token's short-term outlook reflects a sticky risk-off sentiment in the broader cryptocurrency market. 

Low retail demand continues to weigh on the token, shrugging off the launch of the first XRP spot Exchange Traded Fund (ETF) in the United States. XRPC ETF debuted on Thursday, clocking $59 million in volume on the first day of trading. 

XRP supply in profit shrinks as risk-off sentiment prolongs 

The Supply in Profit metric from Glassnode shows the absolute volume of XRP's circulating supply currently held at an unrealized profit. According to the chart below, this volume averages 44 million XRP on Friday, down from a peak of 64 million XRP in mid-July. XRP's supply in profit reached this level in early November 2024, highlighting a one-year low.

The steady decline from mid-July points to a broadening wave of unrealized losses among holders, affecting other factors such as sentiment, liquidity, and price performance.

Still, the decline could signal a turnaround, as the supply available for sale diminishes, suggesting sentiment is bottoming. Moreover, investors could begin seeking new opportunities, increasing demand for XRP and paving the way for a short to medium-term recovery.

Meanwhile, retail demand for XRP has not recovered since mid-October, characterised by a weak derivatives market. CoinGlass data shows the futures Open Interest (OI) averaging $3.78 billion on Friday, slightly up from $3.67 the previous day but down from $4.17 billion posted on November 1.

A steady increase in OI is required to support XRP's short-term recovery, indicating that investors have confidence in the token and the ecosystem and are willing to increase their risk exposure.

Technical outlook: XRP bulls defend key support 

XRP is trading above $2.25 at the time of writing on Friday as bearish sentiment remains sticky across the cryptocurrency market. The token's position below key moving averages, including the 50-day Exponential Moving Average (EMA) at $2.53, the 200-day EMA at $2.57 and the 100-day EMA at $2.63, reinforces the bearish grip.

Sellers have the upper hand with the Relative Strength Index (RSI) at 43 and extending its decline. Lower RSI readings suggest that bearish momentum is building, increasing the odds of a prolonged downtrend.

A short-term support lies at $2.24, which was tested earlier in the day. If the decline extends, XRP will seek liquidity at $2.07 and $1.09, tested on November 4 and in mid-June, respectively. Still, a recovery could ensue if investors buy the dip, building a tailwind for XRP and eyeing highs above the 50-, 200-, and 100-day EMAs.