• XRP extends its decline below the critical $2.00 level amid heightened volatility, exacerbating risk-off sentiment.

• Bitwise XRP ETF debuts, boosting net inflows to $118 million on Thursday.

• Low retail demand, as evidenced by a weak derivatives market, may cap attempts at recovery.

Ripple (XRP) is extending its down leg below $2.00, trading at $1.87 at the time of writing on Friday. Heightened volatility and macroeconomic uncertainty are supporting the sticky risk-off sentiment in the broader cryptocurrency market.

Since the October 10 flash crash that liquidated over $19 billion in crypto assets in a single day, the cross-border remittance token’s retail demand has not picked up, suggesting a deteriorating market structure.

XRP slides despite ETF inflows

Bitwise XRP ETF started trading on Thursday on the New York Stock Exchange (NYSE), giving United States (US) investors regulated access to the underlying asset (XRP) without directly buying or storing the token themselves. Bitwise’s XRP ETF recorded approximately $105 million in inflow volume on Thursday. 

Combined, the Canary Capital XRPC and Bitwise XRP ETFs recorded $118 million in net inflow volume. SoSoValue data shows a cumulative net inflow of $411 million, with net assets of $385 million.

The XRP derivatives market has extended its weakness since mid-October, with futures Open Interest (OI) falling to $3.57 billion on Friday, down from $3.79 billion the previous day. 

In comparison, OI, representing the notional value of outstanding futures contracts, stood at $8.36 billion on October 10 and $10.94 billion on July 22. This is a significant drop in retail demand, depriving XRP of the tailwind it needs to sustain a short-term recovery.

Despite the general bearish trend, traders show a desire to increase exposure by buying the deep. The XRP OI-Weighted Funding Rate stance at 0.0072% on Thursday, up from -0.0006% the previous day, indicates that traders are piling into long positions. Demand for XRP derivatives must continue to rise to steady the token’s short-term recovery.

Technical outlook: XRP accelerates downtrend 

XRP is extending its down leg toward April lows of $1.61 as investors aggressively reduce exposure, citing high volatility on Friday. The token is positioned significantly below the 50-period, the 100-period, and 200-period Exponential Moving Averages (EMAs), all descending on the 4-hour chart and bearishly aligned. This outlook reinforces a downtrend structure likely to cap attempts at recovery in the short term.
The Moving Average Convergence Divergence (MACD) indicator (blue line) remains below the signal line (red) and under the zero mark, with a widening negative histogram that suggests intensifying downside momentum.
The Relative Strength Index (RSI) stands at 23 (oversold), indicating prolonged selling pressure. If the RSI stabilizes, it could precede a corrective bounce. A contraction in the negative MACD histogram alongside an RSI uptick would hint at stabilization, whereas continued expansion would keep the risk skewed toward the April low at $1.61.

The descending trend line from $3.10 caps recovery, with resistance seen at $2.44, keeping the topside limited unless momentum turns decisively. Any rebound would face headwinds at the falling short-term 50-day EMA ($2.16). Bears would retain control unless price reclaims this level on a closing basis.