XRP's Price Has Declined Significantly Over the Past Week

The price of XRP has declined significantly over the past week, reaching a seven-day low of $2.09. Key indicators suggest that the downtrend may continue in the near term, as traders increase short positions in anticipation of further downside movement.

Market data from Coinglass shows a steady rise in the demand for short positions. This trend reveals growing trader confidence in further downside movement, with short sellers increasing their exposure in anticipation of the XRP token’s continued weakness.

As of Monday, August 7, at 10:04 ET, the XRP futures market recorded a long/short ratio of 0.98. This ratio compares the number of long and short positions in a market. When an asset’s long/short ratio is above 1, there are more long than short positions, indicating that traders are predominantly betting on a price increase.

However, when the ratio falls below one, as seen with XRP, it indicates that most traders are positioning for a price drop. This reflects heightened bearish sentiment and growing expectations of continued downside movements.

According to Coinglass, XRP last recorded a long/short ratio above one on April 22. This means it has been over two weeks since bullish positions outnumbered bearish ones in the XRP futures market. The extended period of bearish dominance suggests that market participants have grown increasingly pessimistic about XRP’s short-term prospects.

On the daily chart, the newly formed “death cross” by XRP’s Moving Average Convergence Divergence (MACD) indicator supports this bearish outlook. Readings from the XRP/USD one-day chart have revealed that XRP’s MACD line (blue) closed below its signal line (orange) on Monday, forming a death cross.

This pattern is a notable marker of a sustained downtrend and is widely viewed by traders as a sign of weakening price strength. Hence, XRP risks plummeting further.