Open interest in XRP futures has dropped significantly, reflecting reduced speculative positioning as the cryptocurrency trades below the $3 mark. While short-term dynamics may raise caution, historical trends hint at potential accumulation opportunities as the market cools.
Open Interest Decline Signals Cooling Speculation
Recent data indicates that open interest (OI) in XRP futures has plummeted by 30% over the past month, from $11 billion to $7.7 billion. This decline aligns with a drop in spot prices, which fell from a high of $3.66 to $2.98.
A decrease in open interest usually signifies a reduction in speculative activity, as traders either take profits or decrease their exposure due to market uncertainty. This is not the first time XRP has experienced such a sharp reset; earlier this year, OI dropped by 65%, while spot prices fell by more than 50%.
The current trend, although less severe, mirrors prior configurations, suggesting that traders may re-engage once OI establishes a new base. Technically, XRP indicates a fair value gap between $2.33 and $2.65, which analysts view as a potential demand zone if OI continues to decline. Historically, moderation in leverage has preceded stabilization and accumulation phases that lead to new upward movements.
Controlled De-leveraging Reduces Risk of Cascade Selling
Despite the downturn, liquidation data shows that market pressures remain contained. Only $22 million in long positions were liquidated on Monday, compared to $56 million during the 6% correction on August 14. These figures suggest a relatively controlled de-leveraging compared to previous instances of heavy selling in overheated market conditions.
Limited liquidations mitigate the risk of cascading sell-offs that can further intensify declines in volatile markets. This managed environment provides a degree of resilience, supporting the notion that XRP could find a short-term price floor. If the support zone of $2.33 to $2.65 holds, traders might interpret the current unwind of leverage as constructive rather than indicative of deeper structural weaknesses.
Short-Term Pressure from Whale Inflows
As open interest cools, on-chain data indicates potential headwinds from large holders. According to CryptoQuant, the XRP rally to $3.66 coincided with significant inflows into exchanges, particularly from wallets holding 100,000 to 1 million XRP.
Historically, such spikes in whale inflows have preceded major market peaks, including levels above $3 in 2018, $1.90 in 2021, and $0.90 in 2023. Currently, XRP is consolidating just below $3, with high exchange inflows indicating sustained selling pressure from large investors. Should this trend continue, downside risks towards the support zone of $2.6 could materialize.
However, analysts note that strong defense of the $3 threshold would highlight market resilience and could pave the way for a new bullish push. Structurally, XRP’s overarching bullish trend remains intact, with long-term targets above $5 by 2025 still seen as achievable despite short-term volatility.
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