XRP Sees a Change in Mood as Short Sellers Dominate the Market

The rough start to the week for Ripple [XRP] has led to a noticeable shift in market sentiment, with more traders now opting to take short positions against XRP.

A shift in market sentiment has occurred, with more traders opting to take short positions against XRP. This change was reflected in one of XRP’s key derivative indicators, which pointed toward an increase in bearish sentiment among traders.

XRP Sees a Change in Mood

Our analysis of Ripple’s Funding Rate on Coinglass highlighted a significant shift in market dynamics.

The Weighted Funding Rate for XRP, which stood at about 0.0097% on July 7, underwent a notable decline. By the end of the day, it had dropped below zero, settling into -0.0046% at press time.

This transition from a positive to a negative Funding Rate indicated a change in market dynamics—a shift from buyer to seller dominance.

In essence, a negative Funding Rate suggested that short sellers were willing to pay a premium to maintain their positions. This indicated their expectation that the price of XRP will continue to decline.

Source: Coinglass

Furthermore, this trend of increasing short positions signaled that trader sentiment had turned bearish on XRP. It also showed that more traders were betting against its short-term price recovery.

Is a Recovery Underway?

A glance at XRP on a daily time frame chart provided insight into why many traders have taken short positions against the asset.

XRP began the week on a downward trajectory, culminating in a significant drop. The chart showed a decline of 6.65% by the end of trading on July 7, with the price falling to around $0.41.

Source: TradingView

At the time of writing, XRP had shown some recovery, trading at approximately $0.43, indicating an increase of over 3%. This rebound raised questions about the sustainability of the recent price hike.

Given the volatility and the recent trend toward short selling, both traders and investors were likely to be cautious in their approach.

XRP Remained in a Bear Trend

XRP, on the daily time frame chart, further underscored the asset’s presence in a strong bearish trend. This was highlighted by the Relative Strength Index (RSI).

At press time, XRP’s RSI was below 40, indicating bearish momentum, suggesting the asset might be under significant selling pressure.

Additionally, the chart’s moving averages — often represented as yellow and blue lines — were trending above the press time price.

This configuration usually signaled a bearish market condition, where the moving averages act as resistance levels that can hinder any potential price recovery.

The positioning of these averages above the price reinforced the notion that the downward trend was strong.

Realistic or Not, Here’s XRP Market Cap in BTC’s Terms

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