- Ripple faces increased bearish pressure as XRP drops nearly 10% amid Trump’s tariff plans on Mexico and Canada.
- Ripple could see further declines if XRP falls below the crucial $1.96 support level, risking a drop toward $1.35.
XRP took a hit on Monday as President Donald Trump reaffirmed his plan to impose tariffs on Mexico and Canada starting in March. The remittance-focused cryptocurrency plunged nearly 10%, reflecting the broader market’s reaction.
Crypto investors offloaded assets, wiping out nearly $230 billion in market capitalization. This decline mirrors the initial market response when Trump first announced the tariffs in early February.
Funding Rates Signal Bearish Pressure
XRP’s funding rates have turned negative multiple times over the past five days, indicating growing bearish sentiment.
Funding rates reflect the fees traders pay to maintain futures contracts. When they are negative, short traders compensate long traders, suggesting that the majority expect further declines.
Additionally, XRP’s open interest has struggled to recover since the market crash on February 3. According to Coinglass data, open interest has dropped from 2.02 billion Ripple to 1.40 billion, showing reduced demand for leveraged positions.
Investors Buy the Dip Amid SEC Developments
Despite the bearish outlook, some investors are seizing the opportunity to buy XRP at lower prices. Exchange net outflows on Binance, Kraken, and Coinbase have risen in the past 24 hours, indicating accumulation.
A key factor driving this buying activity is the Securities and Exchange Commission’s (SEC) recent actions. The regulator has dropped cases against major crypto companies, including Coinbase and Robinhood Crypto. Many investors believe the SEC could soon end its long-running legal battle with Ripple, which would be a major win for XRP.
Ripple Eyes Critical Support at $1.96
XRP’s price has fallen below the key $2.55 support level after failing to break above the resistance of a descending triangle and the 50-day Simple Moving Average (SMA).
The next major support lies at $1.96. If bulls fail to defend this level, downward pressure could push XRP toward $1.35.
On the upside, XRP must break out of the descending triangle’s resistance to trigger a bullish reversal.
Technical Indicators Point to Further Weakness
Several indicators suggest XRP may face more downside.
- The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are both trending downward.
- The Moving Average Convergence Divergence (MACD) line is testing its moving average, with its histograms shifting below neutral levels.
If these bearish signals persist, Ripple could struggle to regain momentum in the short term. However, investor sentiment could shift if regulatory clarity emerges, giving XRP a much-needed boost.
