Ripple (XRP) Finds Support at $2.30 as White Summit Disappoints

Ripple (XRP) price experienced additional downside pressure on March 8, closing the week in a lukewarm state.

The price of XRP has faced difficulties in recent days, largely due to a lack of progress in the U.S. regulatory landscape. As the White House hosted a gathering of crypto executives for a discussion on digital assets, hopes for swift action on coins like XRP were dashed.

This had implications for the cryptocurrency markets, which saw a shift in derivatives market trends that could have implications for the near-term outlook of coins like XRP.

What Happened: As the dust settles on the White House Crypto Summit, which saw the participation of major crypto executives, the lack of immediate regulatory clarity is continuing to weigh on altcoins.

While the event generated significant media buzz throughout the week, with confirmed attendance from Ripple (NYSE:REVL) CEO Brad Garlinghouse fueling hopes for positive developments on the regulatory front, the outcome fell short of expectations.

This lack of progress was reflected in the lukewarm price action of XRP, which experienced additional setbacks on Friday.

The Relative Strength Index (RSI) dropped further into oversold territory, highlighting the strong selling pressure that XRP faced.

The Bollinger Bands displayed a widening pattern, indicating increased price volatility in response to the unfolding events.

The lower Bollinger Band provided support at the $2.30 level, which could be tested if sellers attempt to exert more pressure.

The Accumulation/Distribution indicator moved into negative territory, suggesting that sellers were beginning to exert control over the price trends.

The implications of Non-Farm Payroll (NFP) data also played a role. The U.S. NFP report showed a concerning rise in the unemployment rate, putting additional downward pressure on the markets.

This macroeconomic factor prevented XRP from extending gains post-summit, as the lack of congressional approval for executive orders left traders pessimistic about the speed of regulatory progress.

This led to a 2% dip in the price of XRP on Friday, bringing total weekly losses to 13%. However, bulls staged a mild recovery, pushing the price of XRP up by 2% to reach the $2.47 level by Saturday.

The majority of short traders had positioned for a much deeper correction on Friday, but key derivatives market metrics suggest that these traders are adjusting their overleveraged positions. This could help the price of XRP to score mild gains over the weekend.

The data from derivatives market analytics firm Coinglass shows that trading volumes fell sharply by 45%, which is a common precursor to a shift in momentum.

The volume on XRP dropped significantly as the first green candle appeared in four days. The volume contraction signals a pending shift in directional sentiment from last week's dominant bearishness.

In addition, the open interest fell by 6% during the day as prices rose by 2%. This indicates capital outflows from short traders closing their positions rather than new capital entering on the long side.

The development bodes well for a short squeeze scenario, where shorts covering positions could help to drive a gradual recovery in prices.

The long/short ratio is still heavily skewed in favor of longs across major exchanges. Binance XRP/USDT accounts had a long/short ratio of 3.6642, while OKX traders had a 2.71 long/short ratio.

This indicates that bullish sentiment is returning despite the broader market's inertia.

Finally, the options market also shows signs of a shift in positioning. While options volume dropped by 73%, options open interest rose by nearly 19%.

This suggests that traders are adjusting their positions rather than exiting completely. The repositioning signals confidence that the $2.30 level could hold and possibly enable a move higher without any further bearish catalysts.

Related Link: How Interest Rates Could Impact Bitcoin Price In The Long Term

Why It’s Important: The prevailing derivatives data suggests that most short traders had anticipated a much larger price drop following the White House Summit.

However, with no major post-event euphoria materializing and optimism waning due to the unfolding macroeconomic backdrop, these traders are unlikely to realize amplified gains in the near term.

Instead, the data indicates that short traders are now repositioning, which could help the price of XRP to stabilize above the $2.30 support level or even move higher towards $2.50 in the absence of any further bearish catalysts.

If bullish momentum continues building over the weekend, a potential retest of the $2.50 mark remains within reach, setting the stage for further upside in the coming week.