Ripple Price Forecast: Even as leveraged traders cut risk exposure, XRP builds upside momentum

• Bulls appear to be returning to XRP, which trades above $1.35 on Wednesday after gaining 5% over two days.
• Reduced risk-taking by traders sees Binance’s Estimated Leverage Ratio fall 26% in less than a month.
• The 100-day EMA provides support for XRP, while the 50-day and 200-day EMAs form resistance above it.

Tentative signs of a recovery are emerging for Ripple (XRP) on Wednesday, with the price inching above $1.36. Gains have continued for a second straight day, offering early indications of a potential reversal after the recent sell-off below $1.30.

The scope for XRP’s recovery nevertheless remains structurally constrained by short- and long-term moving averages. Medium-term support around $1.34 offers some protection against downside pressures, increasing the chances of a rebound towards $1.40. A decisive break below that support zone, however, could prompt a broader sell-off and leave XRP facing lower demand zones at $1.12 and $1.00, respectively.

Is interest in XRP derivatives weakening?

A marked decline in traders’ relative exposure to leveraged positions is evident in XRP’s Estimated Leveraged Ratio on Binance. From 0.229 in September, the ratio has dropped 26.2% to around 0.169.

The fall points to substantially subdued demand for leveraged XRP positions, as traders scale back risk by exiting open positions or using less leverage. A lower ratio is also likely to make the token less sensitive to volatility linked to leveraged positions. The extent of that effect, however, hinges on wider crypto market conditions and the size of positions still open.

Writing in the CryptoQuant Insights section, Arab Chain highlighted: “However, a decline in this metric does not necessarily mean that traders are shifting toward selling, nor does it independently signal a bearish or bullish market trend,” adding, “The decline may reflect a reduction in leveraged positioning, potentially mitigating the risks associated with liquidations.”

Demand from leveraged traders in the derivatives market is picking up, though gradually, according to perpetual futures Open Interest (OI). On Wednesday, OI averaged 3.04 billion XRP, compared with 2.84 billion XRP a day earlier. Even so, it remains substantially below the August and September highs of 3.78 billion and 3.67 billion XRP. Taken alongside Binance’s Estimated Leveraged Ratio, these readings suggest a recovery could prove difficult unless traders substantially raise their risk exposure.

Technical analysis: Can XRP recover within a broader bearish structure?

Bulls are attempting to regain control of XRP’s trend, lifting the token above $1.36 after its correction below $1.30 earlier this week. However, the remittance token remains beneath the 50-day and 200-day Exponential Moving Averages (EMAs), at $1.38 and $1.37. This leaves the near-term outlook bearish, with overhead supply continuing to restrict rallies.

Further reinforcing the cap on gains is the SuperTrend line at $1.47. Meanwhile, the Moving Average Convergence Divergence (MACD) remains just below zero, and the Relative Strength Index (RSI) is close to 47. Together, these indicators suggest subdued momentum without a clear direction, rather than a convincing recovery.

Before XRP can approach the SuperTrend level of $1.47 and the wider downtrend structure marked by $1.62 and $1.70, it faces a narrow resistance band. The first hurdle is the 200-day EMA at $1.38, with the 50-day EMA close behind. Immediate downside support lies at the 100-day EMA at $1.34; a clear breach would likely pave the way for a deeper decline over the coming sessions.

(The technical analysis of this story was written with the help of an AI tool. Know more.)