Will altcoins fall into the hands of XRP short sellers who dominate

CoinJieNet Report:
XRP volume has slightly increased in the past 24 hours. Recently, there has been a struggle between sellers and buyers.
The difficult start of the week for Ripple [XRP] has resulted in a noticeable shift in market sentiment, with more and more traders choosing to short XRP.
This change is reflected in a key derivative indicator for XRP, which indicates an increase in bearish sentiment among traders.
XRP sees a change in sentiment
AMBCrypto’s analysis of Ripple’s funding rate on Coinglass reflects a significant shift in market dynamics.
The weighted funding rate for XRP was around 0.0097% on July 7, but it has decreased significantly, dropping below zero by the end of the day and reaching -0.0046% at the time of writing.
This shift from positive to negative funding rates indicates a shift from buyer dominance to seller dominance.
Essentially, negative funding rates indicate that short sellers are willing to pay a premium to maintain their positions. Therefore, they expect XRP’s price to continue to decline.
Furthermore, the increasing trend in short positions suggests that traders’ sentiment towards XRP has turned bearish. This also indicates that more and more traders are betting on its short-term price recovery.
Is a recovery underway?
AMBCrypto’s observation of XRP on a daily timeframe provides insights into why many traders are taking short positions on the asset.
XRP started the week with a downward trend, eventually experiencing a significant drop. The chart shows that by the end of trading on July 7, the price had dropped by 6.65% to around $0.41.
At the time of writing, XRP has seen some recovery, trading at around $0.43, with a gain of over 3%.
This rebound raises questions about the sustainability of recent price increases. Considering the volatility and recent short-selling trend, traders and investors may approach with caution.
XRP in a bear market
The daily timeframe further highlights the presence of XRP in a strong bearish trend. The Relative Strength Index (RSI) emphasizes this.
At the time of writing, XRP’s RSI is below 40, indicating bearish momentum and suggesting that the asset may face significant selling pressure.
Additionally, the moving average lines (typically represented by yellow and blue lines) in the chart are trending above the price at the time of writing.
Whether real or not, this configuration typically indicates a bearish market condition, with the moving averages acting as resistance levels that could hinder any potential price recovery.
The positioning of these averages above the price strengthens the view of a strong downward trend.