XRP Price Faces Resistance at $2.35 Amid Declining Trading Interest and Negative Funding Rates

XRP’s price has shown signs of recovery since hitting a low of $1.89 on March 11, but continues to struggle beneath crucial resistance levels. Technical indicators and market sentiment suggest the sixth-largest cryptocurrency by market cap may face additional downward pressure in the coming days.

## Bearish Sentiment Reflected in Funding Rates

The cryptocurrency’s futures market data reveals concerning signals for XRP bulls. Negative funding rates across exchanges indicate that bearish sentiment currently dominates trader psychology.

Funding rates serve as periodic payments between long and short traders in perpetual futures contracts, helping align derivatives prices with spot markets. When these rates turn negative, it means short sellers are paying premiums to long position holders – a clear sign of market pessimism.

This negative funding environment creates a challenging atmosphere for potential buyers, as maintaining long positions becomes financially less attractive. Market analysts suggest this persistent bearish sentiment could trigger sharper price declines if the trend continues.

Compounding these concerns, XRP’s open interest (OI) in futures markets has plummeted by over 57% from its January peak of $5.67 billion to approximately $2.4 billion as of March 18. This significant reduction in capital allocation typically indicates waning trader interest and often precedes periods of price weakness.

## Technical Structure Points to Potential Downside

On the technical front, XRP’s four-hour chart displays an inverted V-shaped pattern – a formation that typically signals exhausted buying momentum followed by rapid selling pressure.

The cryptocurrency faces formidable resistance between $2.35 and $2.42, a range currently reinforced by both the 100-period and 200-period simple moving averages (SMAs). The relative strength index (RSI) has dropped below the midpoint of 50, confirming sellers have seized control of near-term price action.

Traders are now closely monitoring the support zone between $2.20 and $2.28 (where the 50 SMA sits). A breakdown below this range would likely accelerate XRP’s decline toward the pattern’s neckline at $2.01. Should this level fail to hold, further drops to the February 28 low of $1.94 or even a retest of $1.89 appear increasingly probable.

For bulls to invalidate this bearish scenario, XRP must maintain support above the 50 SMA and successfully breach the supply zone between $2.35 and $2.42. Such a move could potentially drive prices toward $2.47, negating the current downtrend.

## Contrarian Bullish View

Despite prevailing negative indicators, crypto analyst Dark Defender maintains an optimistic outlook on XRP’s future trajectory. In a March 17 post on X, the analyst suggested the primary correction across multiple timeframes has concluded.

“The primary correction on the weekly, daily frame and 4-hour structure is over for XRP,” stated Dark Defender, adding that while short-term volatility will continue, XRP has “started Wave 1 with an aim of $5.85.”

The analyst identifies $2.22 as a key support level and $3.39 as resistance, concluding optimistically that “The upcoming weeks will be fantastic.”

Market participants should closely monitor these technical levels while remaining aware that cryptocurrency markets often exhibit unpredictable behavior, particularly during periods of conflicting signals.

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