Ripple (XRP) remained under pressure on Thursday after falling more than 2% this week, and the token is now approaching an important support zone that could determine its next directional moves. A combination of sell-side activity, cautious on-chain signals, and mixed derivatives positioning suggests that its near-term upside may remain limited.

On-Chain Data Tilts Bearish

CryptoQuant's market summary points to a cautious outlook for both altcoins. XRP's futures market is showing signs of overheating and sell-side dominance, while retail traders account for some of the current activity. Similar overheating conditions are emerging in the spot market, although several other indicators remain neutral.

Taken together, these signals point to cautious and moderately bearish sentiment among XRP traders.

Derivatives positioning also revealed conflicting sentiment between XRP and Stellar traders. Data from Coinglass shows XRP's long-to-short ratio fell to 0.83 on Tuesday, approaching its lowest level in a month. A reading below 1 means short positions outnumber long positions, indicating that more traders expect XRP's price to decline.

The XRP funding rate turned negative on Wednesday and stood at -0.0012% as of Thursday. Negative funding means traders holding short positions are paying those with long positions, reinforcing the bearish tone surrounding the token.

XRP Nears the Critical 200-Day EMA

XRP traded around $1.392 on Thursday after declining more than 2% this week. Despite the pullback, the token remains above its 50-day, 100-day, and 200-day exponential moving averages (EMAs), which are clustered between approximately $1.244 and $1.354. As long as that cluster continues to hold, XRP's underlying structure remains constructive.

Momentum indicators are cooling, however. The Relative Strength Index (RSI) sits in the mid-50s, showing that bullish momentum has moderated without completely disappearing, while the Moving Average Convergence Divergence (MACD) line remains below zero, signaling weakening upside momentum.

XRP's first major support is the 200-day EMA near $1.354. A break below this level could expose horizontal support at $1.300, followed by the 50-day and 100-day EMAs. The next significant downside target would sit around $1.000.

On the upside, XRP faces major resistance near $1.900. A daily close above this level would be required to restore stronger bullish momentum and support a more substantial price recovery. Until that happens, weakening derivatives demand and fading momentum could keep XRP under pressure near its moving-average support zone.

This article originally appeared on CoinJournal.