XRP moved sharply lower on January 25, sliding into a critical support range between $1.90 and $1.85 as derivatives-driven selling pressure increased across major exchanges.
The decline unfolded during active trading hours as open interest rose alongside falling prices, a combination that typically signals the build-up of leveraged short positions rather than organic spot selling.
Market data indicated that funding rates and perpetual swap premiums became highly negative, meaning that traders were paying to hold a bearish position.
Expert Cryptoinsightuk described the action as unusual, pointing out that XRP also pushed a previous wick into a year-long support level and indicated a bullish signal on the 4-hour chart. This configuration indicates that leverage may be exaggerating the bearish price action.
Short-Term Breakdown Meets Heavy Derivatives Positioning
On the 15-minute chart for Binance Futures, XRP had a strong breakdown bar and then a weak bounce. This indicates that buyers were primarily absorbing forced selling rather than fighting for a strong reversal.
As the price fell, open interest increased, indicating that new positions were being established during the fall, mostly short positions.
Funding rates turned strongly negative, indicating a strong bearish sentiment, as traders were essentially paying to remain short. However, spot trading volume increased but remained close to the lows.
Such volume could indicate either panic selling or buying at a bottom, but since there is no strong reversal yet, it appears that sellers are still in control.
As of January 25, XRP was trading at about $1.85, which has been a demand zone on several occasions in the past year. However, testing it repeatedly would have weakened it, as the buying liquidity would have been depleted.
XRP Higher Timeframe Structure Keeps Pressure on Bulls
The 4-hour chart of XRP/USDT on KuCoin is still depicting a strong downtrend with lower highs and lower lows. The price remains below the $1.906-$1.91 level, which was a support zone but is now acting as overhead supply.
The momentum indicators reflect the same fight. The 14-period RSI is about 39, which shows weak momentum and not a true reversal. If the price fails to remain above $1.90, then the danger of a fall remains high.
Liquidity Clusters Point to Volatility Risk Ahead
The data for short-term liquidation indicates that the market is weak. XRP has fallen into a lower price region, and there are a lot of buy orders placed above the price at $1.95 and $2.05. These levels may form a support that pulls the price up, but this will happen only after the downside liquidity is removed by the buyers.
If the buyers support the region around $1.85, the large short positions may be liquidated in a short period of time, and the price may bounce back to the region around $2.00-$2.10. However, if the price breaks below the support level, it may accelerate the fall of the price.
Also Read: XRP Holds $1.90 as Spot ETF Inflows Signal Renewed Demand
