Ripple’s XRP Open Interest recently experienced a significant drop of $2.46 billion, causing a 13% decline in price from its local peak of $3.60. This sharp decline in Open Interest was accompanied by a rotation of capital into Ethereum (ETH), leading to a 7.54% drop in the XRP/ETH pair. However, XRP/ETH has now reached a support zone that previously triggered a 25% bounce, suggesting a potential reversal in the near future.
Despite the substantial decrease in Open Interest, XRP has only dropped 10%, indicating strong demand and bid absorption at the $3.10-$3.20 level. The daily chart shows XRP consolidating within this key demand zone, which often precedes a breakout in a bull market. Additionally, XRP/ETH is currently at a bounce territory, hinting at a possible resurgence in price.
The recent drop in XRP Open Interest coincided with various other indicators, such as overheated Funding, stretched RSI, and a spike in Realized Profits above $1 billion. These factors suggest that the $2.46 billion wipeout in Open Interest may have served as a necessary reset for XRP.
Structurally, XRP remains resilient, and if capital flows back into the market, it could set the stage for a breakout above $3.50. Overall, despite the recent turbulence in Open Interest, XRP’s price action and technical indicators point towards a potential recovery and bullish momentum in the near future.
In conclusion, while the drop in Open Interest may have initially caused some turbulence in the XRP market, the underlying demand and technical setup suggest that XRP may be gearing up for a potential rally. Investors should keep a close eye on key support levels and market dynamics to capitalize on potential opportunities in the XRP market.