Key takeaways:
The open interest in XRP has decreased by 30%, indicating a slowdown in futures trading activity.
A significant demand zone is identified between $2.33 and $2.65 if the selling pressure continues.
Increased whale inflows suggest profit-taking, yet the long-term upward movement towards $5 in 2025 remains viable for XRP.
The open interest (OI) for XRP (XRP) futures has declined by 30% over the last month, dropping to $7.7 billion from $11 billion, with prices retracting from a peak of $3.66. A fall in open interest usually signifies reduced speculative activity, which could mean profit-taking or diminishing confidence among leveraged traders.
This scenario is reminiscent of Q1, where XRP’s OI plummeted from $8.5 billion to $3 billion, reflecting a dramatic 65% decrease alongside a more than 50% drop in spot prices. The current situation mirrors this trend, albeit with lesser intensity, suggesting potential accumulation when OI stabilizes within a new base range.
XRP open interest and price comparison. Source: CoinGlass
From a technical perspective, XRP presents a daily fair value gap ranging from $2.33 to $2.65, indicating this area as a likely demand zone if open interest keeps declining. Typically, a decrease in OI precedes periods of price stabilization or a new accumulation phase, historically leading to enticing re-entry points before renewed upward movements occur.
XRP one-day chart. Source: Cointelegraph/TradingView
Notably, liquidations have remained relatively low. Only $22 million in long positions were liquidated on Monday, with $56 million during the 6% drop on August 14. These figures suggest a controlled leverage exit compared to usual market washouts, lowering the risk of a cascading sell-off.
In summary, while the decline in open interest raises caution, it opens possibilities for a price bottom. If XRP maintains the $2.33–$2.65 zone, traders might see the cooling leverage conditions as a potential stepping stone for the next upward movement, rather than a plunge to new lows.
Related: XRP price struggles to surpass $3: Is a breakout still achievable?
XRP whale inflows exert near-term selling pressure
According to data from CryptoQuant shows that XRP’s recent ascent to $3.66 was marked by notable inflows to exchanges across all value bands, predominantly from whale groups holding between 100,000 and 1 million XRP. Historically, such spikes in inflows have indicated approaching market peaks, as noted in 2018 above $3, in 2021 near $1.90, and around $0.90 in 2023, implying that large investors are preparing to take profits again.
XRP exchange inflow transaction count. Source: CryptoQuant
Currently, XRP is trading just below $3 while inflows remain strong, suggesting immediate selling pressure. Should whales continue to sell, there may be downside risks targeting the $2.6 support zone.
Conversely, a solid defense of the $3 level would demonstrate resilience, potentially laying the groundwork for another bullish rally. Structurally, the overarching upward trend of XRP remains unaffected. Compared to previous cycles, the crypto asset looks to be in a healthier technical state, keeping long-term objectives above $5 in 2025 within reach despite short-term fluctuations.
Related: Gemini overtakes Coinbase on app store following XRP Mastercard launch
This article is not intended as investment advice or recommendations. Every investment and trading decision carries inherent risks, and readers should conduct independent research before making any decisions.
