Ripple’s XRP futures show increased bearish trends despite long-term holders seeing strong gains

• XRP’s open interest and funding rates have generally remained in negative territory over recent weeks.
• Despite the prevailing bearish sentiment in the futures market, investors have maintained composure, likely due to substantial profits.
• XRP may switch to a bullish trend if it successfully holds the upper boundary of a descending channel.

On Tuesday, Ripple’s XRP experienced a 1% dip, as on-chain and futures data highlight the repercussions of the latest market downturn on its investors.

XRP’s significant profit margin has mitigated its price drop

The open interest (OI) for XRP futures has largely remained unchanged since the market crash in early February. The remittance-oriented token has seen a 33% reduction in OI from February 1 to March 18, based on information from Coinglass.

Open interest represents the total number of outstanding contracts in a derivatives market. A decrease in OI suggests a prevalent risk-off attitude among traders.

XRP open interest. Source: Coinglass

Furthermore, XRP funding rates have predominantly shown negative figures in recent weeks, reflecting a trend where most traders are opting for short positions amid the broader crypto market consolidation.

Funding rates are periodic payments between those holding long and short positions to align the price of perpetual futures contracts with the underlying asset they represent.

Even though XRP’s derivatives market suggests a heightened bearish sentiment, its price decline has been less severe in comparison to many leading cryptocurrencies. While Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) have all suffered losses this week, XRP managed to achieve a 3% gain.

One possible explanation for the modest price dip is that XRP investors—particularly long-term holders—are still enjoying an average return of 233%, according to data from Santiment.

The Dormant Circulation metric, which tracks the flow of previously inactive tokens, indicates that most of XRP’s recent distribution stems from coins that are one year old or younger.

XRP dormant circulation. Source: Santiment

Meanwhile, the resolution of the SEC vs. Ripple legal dispute could serve as a catalyst for XRP to enter a bullish phase, following reports that both sides are nearing a settlement.

XRP fights to maintain crucial support level

XRP has faced $7.40 million in futures liquidations over the past 24 hours, as reported by Coinglass. The total liquidations include $5.15 million in longs and $2.25 million in shorts.

The token is currently struggling to remain above the upper boundary of a descending channel after briefly breaking above it over the weekend. It is retesting this channel’s upper boundary support for the third consecutive day.

XRP/USDT daily chart

If XRP can hold the upper boundary of the descending channel, the next significant resistance level is at $2.72. Surpassing $2.72 could propel XRP toward its highest mark in seven years.

The Relative Strength Index (RSI), Stochastic Oscillator (Stoch), and Moving Average Convergence Divergence (MACD) are all testing neutral levels. A decisive crossover above these levels would signify a shift toward bullish momentum that could elevate XRP’s price.

A daily candlestick closing below the support around the psychological $2.00 level would invalidate this outlook, pushing XRP down to $1.35.