Ripple Price at Risk of Deeper Pullback Despite Capital Inflows

The price of Ripple (XRP) has been experiencing a downward trajectory, testing support at the $1.40 level on Thursday. Despite this, XRP remains technically weak, with key momentum indicators weakening.

Market participants have maintained confidence in XRP, increasing exposure through spot Exchange-Traded Funds (ETFs) and derivatives. The increase in demand for XRP ETFs aligns with rising market sentiment, as reflected in the Crypto Fear & Greed Index.

The derivatives market also shows increasing strength, albeit gradually, with the futures Open Interest (OI) rising to $2.61 billion on Thursday from $2.59 billion the previous day. However, the current retail demand pales in comparison to the OI peak of $10.94 billion reached in July.

From a technical perspective, XRP trades above $1.41, holding marginally above the 50-day Exponential Moving Average (EMA) at $1.41. This configuration hints at a neutral-to-mildly constructive near-term bias, with the pair attempting to stabilize within a broader corrective context.

XRP's price action is closely tied to its Open Interest and funding rate dynamics. Higher Open Interest is associated with higher liquidity and new capital inflow to the market, while a consistently negative funding rate implies a bearish sentiment among investors.