XRP, XLM Outlook: Derivatives Data Signals Caution as Price Momentum Weakens

XRP and XLM faced renewed selling pressure as derivatives positions started weakening and momentum indicators turned softer, signaling increased caution among traders. On Wednesday, XRP changed hands around USD 1.4996, while XLM fell to about USD 0.214 after recording losses at the beginning of the week.

Despite this dip, both currencies are still above their medium-term moving averages. Thus, they remain intact in based on broad technical patterns.

Derivatives Positioning Turns Defensiv

Derivatives markets show traders becoming increasingly cautious toward both assets. XRP’s long-to-short ratio stood at 0.85 on Tuesday, while XLM recorded a ratio of 0.96. Readings below one indicate that short positions exceed longs, suggesting traders are increasingly positioned for further downside.

Funding Rates Show Different Conditions

XRP’s funding rate turned positive over the weekend and reached 0.0097% on Tuesday. Positive funding means long-position holders are paying shorts, indicating that some leveraged bullish positioning remains.

XLM’s funding rate moved negative on Monday and reached -0.0056% on Tuesday. Shorts paying longs generally reflects stronger bearish positioning within perpetual futures markets.

On-Chain Indicators Show Selling Pressure

Market indicators also point toward caution. XRP’s spot and futures markets showed overheating conditions, while futures data indicated sell-side dominance. XLM’s spot market showed healing conditions, although its futures market also remained dominated by sellers. The combination suggests derivatives traders remain defensive even as spot-market conditions provide some support.

XRP Holds Above Major Support

XRP remains above its 50-day, 100-day, and 200-day exponential moving averages, clustered between approximately USD 1.33 and USD 1.40. Relative Strength Index (RSI) holds at 56 and remains higher than the neutral level of 50. This suggests that the buyers have not completely lost control. On the other hand, the slightly negative MACD indicator indicates decreasing upside momentum.

The initial resistance level is at USD 1.671, followed by USD 1.90. On the downside, the support levels for XRP are around its 50-day EMA at USD 1.398, 200-day EMA at USD 1.378, and 100-day EMA at USD 1.332. A deeper correction could take the token to USD 1.30.

XLM Momentum Begins to Soften

XLM remains above its major EMAs clustered around USD 0.19-USD 0.20, while an ascending trendline near USD 0.191 provides additional support. Its RSI near 54 indicates relatively balanced momentum, although the slightly negative MACD suggests buying strength is fading.

Immediate support stands around USD 0.202, followed by the 50-day EMA near USD 0.199. A stronger decline could expose the USD 0.191-USD 0.192 support region, followed by USD 0.177. On the upside, USD 0.234 remains the key resistance level. A daily close above this barrier could strengthen XLM’s bullish structure despite currently cautious derivatives positioning.

Final Thoughts

XRP and XLM remain technically supported, but derivatives data shows traders becoming increasingly cautious. Holding key support levels could preserve their broader bullish structures despite fading momentum. A breakdown below those levels, however, could expose both tokens to a deeper correction.

Also Read: Can XRP Change the Way of Remittance Service in the Worldwide Market?

FAQs:

1. Why are XRP and XLM prices facing pressure?

Both tokens are experiencing weaker derivatives positioning and fading bullish momentum. Long-to-short ratios below one also indicate that traders have become increasingly cautious about near-term prices.

2. What does XRP’s 0.85 long-to-short ratio indicate?

A ratio of 0.85 means short positions outweigh long positions in the measured derivatives market. This suggests traders currently have a bearish or defensive bias toward XRP.

3. What are the important support levels for XRP?

XRP has initial support around USD 1.398, followed by approximately USD 1.378 and USD 1.332. A deeper correction could bring the USD 1.30 level into focus.

4. What are the key support and resistance levels for XLM?

XLM has initial support near USD 0.202 and USD 0.199, with stronger support around USD 0.191-USD 0.192. Its key upside resistance currently stands near USD 0.234.

5. Are XRP and XLM still in bullish technical structures?

Both remain above their major 50-day, 100-day, and 200-day EMAs, supporting their broader structures. However, weakening MACD readings and cautious derivatives positioning indicate that bullish momentum is losing strength.