Will altcoins fall into the hands of XRP short sellers

Coinworld reported:
XRP volume has slightly increased in the past 24 hours. Recently, there has been a battle between sellers and buyers.
The difficult start of Ripple [XRP] this week has led to a significant shift in market sentiment, with more and more traders now choosing to short XRP.
This change is reflected in a key derivative indicator of XRP, which indicates an increase in bearish sentiment among traders.
Change in sentiment for XRP
AMBCrypto’s analysis of the financing rate of Ripple on Coinglass reflects a significant shift in market dynamics.
The weighted financing rate of XRP was about 0.0097% on July 7th, but it has significantly dropped to below zero by the end of that day and has now decreased to -0.0046% as of the time of writing.
This transition from positive rates to negative rates indicates a shift from buyer dominance to seller dominance.
Essentially, negative financing rates indicate that short sellers are willing to pay a premium to maintain their positions. Therefore, they expect the price of XRP to continue to decline.
Furthermore, the increasing trend of these short positions indicates that traders’ sentiment towards XRP has turned bearish. This also suggests that more and more traders are betting on its short-term price recovery.
Is the 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 a downward trend this week, eventually experiencing a significant drop. The chart shows that by the end of trading on July 7th, the price had fallen by 6.65% to around $0.41.
At the time of writing, XRP has shown some recovery, with a trading price of around $0.43, an increase of over 3%.
This rebound raises doubts about the sustainability of recent price increases. Considering the volatility and recent short-selling trend, traders and investors may adopt a cautious stance.
XRP caught in a bear market
XRP is further highlighted on a daily timeframe chart, indicating its presence in a strong bearish trend. This is emphasized by the Relative Strength Index (RSI).
As of the time of writing, XRP’s RSI is below 40, indicating bearish momentum and suggesting that the asset may face significant selling pressure.
In addition, the trend of the moving average lines (usually represented by yellow and blue lines) in the chart is above the price at the time of writing.
Whether real or not, this configuration typically indicates a bearish market condition, with the moving average lines acting as resistance levels that may hinder any potential price recovery.
The positioning of these averages above the price reinforces the view of a strong downward trend.