Will XRP hold important support when OI falls sharply?

Ripple (XRP) is facing strong sell pressure as it enters the weekend, currently hovering around the 2.82 USD mark in Saturday's trading session. The bounce back attempt during the day quickly fizzled out before the 2.90 USD barrier, causing the price to fall back to the important support zone of 2.80 USD.

In this context, investors are focusing on a series of key economic data from the United States to predict the upcoming monetary policy direction of the Federal Reserve (Fed). The highlight is the Federal Open Market Committee (FOMC) meeting on September 17, where the Fed is expected to announce its interest rate decision.

If the Fed carries out its first interest rate cut of the year, risk assets such as cryptocurrencies and stocks are likely to gain growth momentum. However, in the short term, the market is bound to experience strong fluctuations, forcing investors to actively manage risk.

Retail demand for XRP declines as open contracts drop sharply

In recent weeks, the demand from retail investors for XRP has significantly decreased. Market data shows that the open interest (OI) on derivatives exchanges has plummeted to 7.4 billion USD, after reaching a peak of 10.94 billion USD on July 22.

The prolonged decline in OI – a measure reflecting the nominal value of outstanding futures contracts – is signaling that confidence in the short-term bounce back potential of XRP is gradually fading. As traders withdraw, the most likely scenario is that the downtrend continues to dominate, even pushing XRP back to test the support zone of 2.70 USD.

Open contracts in XRP futures | Source: CoinGlassHowever, there is still a silver lining: the derivative funding rate remains at a positive 0.0083%. This shows that more and more traders are willing to take risks, opening additional leveraged buy positions with XRP. If this trend continues, the demand from the derivatives market could become a crucial driving force, helping XRP maintain its bounce back and challenge the psychological level of 3 USD.

Funding rate of XRP | Source: CoinGlass## Technical outlook: XRP may extend the downtrend

XRP is testing the important support zone of 2.80 USD after losing some gains in Friday's trading, reflecting a "risk-off" sentiment in the US market. The relative strength index (RSI) is currently at 46 and approaching the oversold zone, indicating that bullish momentum is weakening as the bears gradually take control.

XRP/USDT 4-hour chart | Source: TradingViewFrom a technical perspective, the MACD continues to fluctuate around the 0 level, reflecting a fierce tug-of-war between the two sides. A bearish cross formed by the blue MACD line and the red signal line will confirm a sell signal, thereby triggering a deeper decline, pulling XRP back to test the 2.70 USD mark.

However, if strong demand appears at the 2.80 USD zone and the bulls regain control, the possibility of breaking above the 50-period EMA around 2.84 USD on the 4-hour chart will open up opportunities for acceleration, aiming towards the goal of reclaiming the key psychological level of 3 USD.

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