Decoding why XRP could drop to $2.4 if THIS support fails

Key Takeaways
The price action and the spot and futures CVD highlighted a bearish scenario for XRP in the coming days. The altcoin appeared likely to correct deeper toward $2.6 and $2.4 next.

Ripple [XRP] was defending the $2.74 support level at the time of writing, but market-wide bearish sentiment threatened to send XRP into a bearish trend.
This idea was reinforced by the spot and futures taker CVD being negative over the past month.
The CME Open Interest hit a record in recent days, a development that usually accompanies bullish setups. However, a bullish scenario was yet to unfold here.
AMBCrypto noted that the cost basis distribution heatmap highlighted $2.8 as a key level.
Source: XRP/USDT on TradingView
The August low at $2.74 was vital, as the chart above showed. A drop below this support could usher XRP lower to $2.4.
The MFI was dropping, and the 12-hour structure was bearish. Other metrics agreed with the bearish outlook.
XRP spot and Futures show taker sell dominance
Source: CryptoQuant
Since late July, the spot taker CVD (90-day delta) has been negative.
During this time, XRP price action established the $3.4 level as a stern short-term resistance, just shy of the $3.65 all-time high made in July.
The negative spot taker CVD and falling volume reflected a taker sell dominant phase in the spot market. Investors would want to see this trend change before the $2.74 support is breached.
The Bitcoin [BTC] drop below $110k hinted at market weakness, and XRP holders might have to brace for further losses.
Source: CryptoQuant
Like the spot market, the futures market also reflected a taker sell-dominant phase for XRP. The futures taker CVD over 90 days has also been negative since late July. It showed bearish sentiment behind XRP.
The Open Interest (OI) data from Coinalyze backed up this statement.
Since the end of July, the OI has been in a downtrend. Especially over the past two weeks, the dwindling OI reflected bearish sentiment among speculators.
Source: CryptoQuant
In the face of these bearish insights, the Estimated Leverage Ratio (ELR) appeared to give a positive spin. The falling ELR indicated the market was not dangerously overleveraged.
As such, violent liquidation cascades were likely not a threat to traders.

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