Reasons for Today's Drop in XRP Price

August 28, 2024 08:02 PM AEST | By Team Kalkine Media

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XRP prices have experienced a decline today, reflecting a broader trend in the cryptocurrency market amid a cautious risk-on sentiment. As of August 28, XRP is trading at approximately $0.56, marking a decrease of about 3% over the past 24 hours. This movement aligns with a general downturn in the crypto market, influenced by the anticipation surrounding Nvidia’s upcoming earnings report.

Nvidia, a major player in the semiconductor industry with a market capitalization of $3.2 trillion, is set to release its earnings report after the U.S. market closes today. Analysts project a significant 70% revenue growth for the company this quarter, driven by increased demand for AI technologies. Nvidia’s substantial stock rally in 2024 has notably contributed to the gains in the Nasdaq 100 index, which has shown a growing correlation with the cryptocurrency market. This correlation suggests that the volatility in Nvidia’s earnings could be impacting the broader crypto market, including (XRP).

In addition to the market dynamics influenced by Nvidia, XRP’s recent decline coincides with reductions in open interest and funding rates within its futures market. Data from Coinglass shows that XRP Futures open interest has decreased from approximately $679.81 million to $616.88 million over the past day. Funding rates, which are calculated every eight hours, have also fallen to -0.0102% from a previous rate of 0.0101%. These indicators suggest a bearish sentiment among traders, with a shift towards short positions as reflected by the negative funding rates.

Despite these short-term declines, technical analysis of XRP indicates for a rebound. The cryptocurrency is currently navigating a correction phase within an ascending triangle pattern. After testing the upper trendline as resistance, XRP has pulled back and is now testing the lower trendline as support. This pattern, along with the daily relative strength index (RSI) showing higher lows within a neutral range, suggests that XRP may be poised for a rebound towards the upper trendline, reaching around $0.63.

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