XRP price risks extending decline amid profit-taking, risk-averse sentiment

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Ripple (XRP) trades amid increasing overhead pressure on Thursday, reflecting risk-off sentiment and increasing profit-taking activities in the wider cryptocurrency market. At the time of writing, XRP trades at $2.79, down 3% for the day.

XRP remains in bearish hands as prices across the crypto market drop amid profit-taking and risk-averse sentiment.
Ripple expands its presence in the Middle East with a strategic partnership with Bahrain Fintech Bay.
The collaboration, which builds on Ripple’s Dubai regulatory license, contributes to Bahrain’s digital assets ecosystem.

Retail interest in the cross-border money remittance token has also fallen for two consecutive days, according to the futures Open Interest (OI), which averages $8.47 billion compared to $9.09 billion on Monday.

OI is the notional value of outstanding futures contracts. Hence, a correction implies that traders could be losing confidence and conviction in XRP’s ability to sustain recovery above the pivotal $3.00 level. A steady decline in the OI often signals the potential for an extended price correction.

XRP Futures Open Interest | Source: CoinGlass

Ripple and Bahrain Fintech Bay collaborate to grow digital ecosystem

Ripple has entered into a strategic partnership with the Bahrain Fintech Bay (BFB), expanding its presence in the Middle East region. BFB is a leading fintech incubator and ecosystem builder known for partnering with the kingdom’s government agencies to accelerate digital ecosystem transformation, adoption of blockchain technology and digital assets.

The partnership with Ripple will advance Bahrain’s digital asset ecosystem through several verticals, including the development of proofs-of-concept (PoC), showcasing of blockchain-based solutions in key sectors such as cross-border payments, digital assets, stablecoins and tokenisation.

“This partnership with Ripple reflects Bahrain FinTech Bay’s commitment to bridging global innovators with the local ecosystem, creating opportunities for pilots, talent development, and cutting-edge solutions that will shape the future of finance,” Suzy Al Zeerah, the CFO at Bahrain Fintech Bay, stated.

Ripple’s collaboration with Bahrain Fintech Bay builds on its license from the Dubai Financial Services Authority (DFSA), which was granted earlier this year.

Ripple’s expansion drive to different global regions lays the foundation for seamless cross-border payments, supported by blockchain-based innovation. Demand for XRP and the protocol’s native stablecoin, RLUSD, has the potential to increase over time.

Technical outlook: XRP risks accelerating decline

XRP drops below the 100-day Exponential Moving Average (EMA), currently at $2.85, indicating that bears have the upper hand. Backing the bearish sentiment is a downward-trending Relative Strength Index (RSI) at 41 on the daily chart.

Lower RSI readings toward oversold territory imply a stronger bearish environment, potentially leading to losses extending to test support at $2.70, previously tested in late September.

A recently confirmed sell signal from the Moving Average Convergence Divergence (MACD) on the same daily chart, reinforcing the bearish grip. If the blue MACD line remains below the red signal line, investors would be inclined to reduce risk exposure, in turn, contributing to selling pressure.

XRP/USDT daily chart

The 200-day EMA at $2.64 would serve as a tentative support level if declines accelerate below the demand area marked green on the daily chart at $2.70. Still, if traders buy the dip, a reversal could follow, eyeing a breakout above the descending trendline and the psychological resistance at $3.00.

Cryptocurrency prices FAQs

How do new token launches or listings affect cryptocurrency prices?

Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.

How do hacks affect cryptocurrency prices?

A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.

How do macroeconomic releases and events affect cryptocurrency prices?

Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.

How do major crypto upgrades like halvings, hard forks affect cryptocurrency prices?

Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.