XRP price slides back towards key support — will rising short interest force a retest of $1.90?

XRP price is edging towards a key support level as short positioning grows and on-chain activity rises.

XRP traded at $2.13 at press time after slipping 1.3% in the past day, extending a week of steady weakness that pushed it about 3.5% lower. The token is now about 40% below its July high of $3.65.

Market activity appears to be cooling, with daily XRP (XRP) spot volume falling 27% to $3.41 billion. This shows that traders are reducing exposure while momentum slows.

Short interest expands as funding turns more negative

Data shared by CryptoQuant contributor PelinayPA on Dec. 3 shows that funding rates have stayed negative for several days and are moving deeper into negative territory. Short positions continue to outweigh long positions, which supports the directional pressure already visible on XRP’s chart.

This has capped upward moves because buyers are not building positions with conviction.

PelinayPA noted that the current setup increases the probability of XRP revisiting the $2 to $1.9 zone. While a sharp short squeeze isn’t likely yet, if funding falls further, the analysis also sees a chance that XRP may briefly move up towards the $2.25–$2.35 range as short positions are forced to close.

A separate analysis from CryptoOnChain reveals a sharp rise in XRP velocity on Dec. 2. At 0.0324, the metric has climbed to its highest point of the year, indicating active on-chain movement and quick circulation.

This suggests that XRP is being used far more intensively than earlier in the year, with traders and whales moving coins at a faster rate.

XRP price technical analysis

On the daily chart, XRP is still trapped inside a clear downward structure. The price is currently below the 50-, 100-, and 200-day moving averages, indicating that momentum has not yet turned positive.

Although the 20-day moving average is close to the current price, it hasn’t flipped bullish. This keeps the wider trend pointing downward, so a meaningful rebound remains unlikely for now.

Volatility has eased, as shown by the relatively narrow Bollinger Bands. Price struggled to break above the upper band and is now drifting near the middle band. Should selling pressure continue, the next important level lies at the lower band, near $1.96.

Conflicting signals are coming from momentum indicators. While the MACD suggests an early bullish crossover, the signal is still weak, and the relative strength index has maintained a neutral position around 48.

Support sits at $2 and then $1.9. Resistance is located near $2.25 and then $2.35. A clean break above the upper band would be the first sign of renewed strength, while a drop under $2 would likely invite another wave of short activity.