Ripple (XRP) price stalled below the $2.40 mark on Wednesday, May 21, despite Bitcoin surging to new all-time highs above $109,500. Derivatives market data shows $145 million in bearish leverage overhead, as XRP lagged behind the broader crypto rally. Regulatory uncertainty continues to weigh heavily after a U.S. District Judge upheld the $125 million penalty against Ripple, deterring bullish momentum.
XRP Faces $320M Derivatives Wall as Bears Eye $2.50 Rejection
Ripple (XRP) emerged as one of the weakest performers on Wednesday, even as Bitcoin’s record-breaking rally lifted top altcoins.
Cardano (ADA), Solana (SOL), and Binance Coin (BNB) each posted over 3% gains, breaking past resistance at $0.73, $165, and $645, respectively. In contrast, XRP managed only a 1.5% uptick, failing to pierce the $2.40 resistance.
Daily trading volume for XRP stood at $2.7 billion—down nearly 80% from its May 13 peak of $11 billion. This signals fading investor interest following U.S. District Judge Analisa Torres’ decision to uphold Ripple’s $125 million fine.
Why XRP Price Fell Behind as BTC Hit New Highs
The sluggish Ripple price action can be traced to mounting regulatory pressure and a bearish derivatives landscape. While ADA, SOL, and BNB thrived on BTC’s $109K breakout, XRP generated barely half their returns.
Over the last seven days, XRP’s derivatives liquidation map shows $319.91 million in short leverage, significantly outweighing $230 million in long positions.
Notably, $165 million of this short interest is clustered at the $2.50 level—a technical and psychological barrier.
This massive bearish wall suggests that traders are betting heavily on XRP’s failure to break $2.50.
With overall demand weakening and legal risks looming, investors appear more willing to rotate capital into regulatory-clearer Layer-1s, leaving XRP vulnerable unless sentiment or macro flows shift decisively.
XRP Technical Price Analysis: XRP/BTC Pair Flashes Bullish Divergence Signal
Despite Ripple’s (XRP) underperformance this week, analysts are pointing to a potentially bullish setup emerging on the XRP/BTC trading pair.
Cryptoinsightuk highlighted that the pair has returned to a historically reactive support level, coinciding with a bullish divergence on the RSI indicator—often a precursor to short-term rebounds.
As seen in the daily chart, XRP/BTC is trading around 0.00002206 BTC, where price action is pressing into a zone that previously triggered rebounds.
More importantly, while price dipped to retest recent lows, the Relative Strength Index (RSI) printed a higher low, forming a classic bullish divergence. This pattern suggests that bearish momentum may be waning, setting the stage for a reversal.
Bullish Scenario: If XRP/BTC confirms the bounce and reclaims 0.00002450 BTC in the coming sessions, it could rally toward the next major resistance near 0.00002800 BTC a zone last tested in March.
Bearish Invalidator: A drop below 0.00002180 BTC would break market structure and likely trigger extended downside toward 0.00001900 BTC, invalidating the bullish divergence setup and reinforcing broader weakness.
With over $165 million in short leverage stacked around $2.50 in the USD pair, bulls will need strong momentum, and perhaps a broader sentiment shift—to flip both key pairs bullishly.
Until then, XRP remains at a technical crossroads, with derivative traders and chart watchers locked in on whether the RSI signal marks a true turning point or another failed breakout attempt.
Frequently Asked Questions (FAQs)
XRP is lagging due to heavy regulatory pressure and over $145 million in short leverage blocking upward momentum near $2.50.
Derivatives data shows $165 million in short interest at $2.50, creating a strong resistance wall amid weak investor confidence.
Yes. A bullish RSI divergence on the XRP/BTC pair signals a possible short-term rebound if key levels hold.
Coingape Staff
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Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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