- XRP Futures and Open Interest data show that headwinds linger in the market.
- Despite the bearish outlook, XRP proponents are hoping for an ATH retest in the long term.
Onchain and futures data has revealed bearish sentiments concerning XRP, the native digital asset associated with Ripple Labs. However, the price of XRP, which declined 1% on Tuesday, is back in the green. At the same time, several indicators show signs of bullishness.
XRP OI and Funding Rates Still Negative
The futures Open Interest (OI) of XRP has remained low since the early February market crash. Data from the onchain analytics platform Coinglass shows XRP has shed 33% of its OI between February 1 and March 18.
Open Interest is the total amount of outstanding contracts in a derivatives market. A decrease in OI suggests that traders are liquidating their positions, which could indicate they are losing interest in the asset.
XRP funding rates have also remained negative recently, indicating that most traders are opening short positions. This move follows the recent consolidation in the general crypto market.
Funding rates are periodic payments between long and short traders holding perpetual futures contracts. It aims to keep the contract price aligned with the spot price of the underlying asset tracked by traders.
Overall, the OI and funding rates show heightened bearish sentiments in the XRP derivatives market. Meanwhile, XRP’s recent price outlook is quite diferent compared to most top cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
While the cryptocurrencies declined by about 3% on the weekly chart, XRP surged 3.8%. The involvement of long-term holders (LTH) or XRP investors is probably one reason for the low price decline. According to Santiment data, investments from LTHs have increased by an average of 233%.
Most of XRP’s recent distribution comes from one-year-old or younger coins, as indicated by the Dormant Circulation metric. This metric measures the movement of previously idle tokens.
Technical Analysis and XRP Price Action
XRP is currently trading as the fourth largest cryptocurrency, with a market capitalization of $134 billion. Its price is now $2.3, demonstrating a 0.8% increase over the previous day. The daily trading volume, however, declined by over 19%, suggesting low investors’ activity.
Based on technical analysis, XRP has struggled to hold the upper boundary of a descending channel since breaking above it over the weekend. This is the third consecutive day the coin has retested the channel’s upper boundary support.
If XRP holds the descending channel’s upper boundary, the next key resistance is $2.72. A move above $2.72 could send XRP reclaiming its seven-year high.
Technical indicators, including the Relative Strength Index (RSI), Stochastic Oscillator (Stoch), and Moving Average Convergence Divergence (MACD), are testing their neutral levels. A solid crossover above their neutral levels will indicate a transition toward dominant bullish momentum, potentially boosting XRP’s price.
Meanwhile, the conclusion of the Ripple vs SEC case could add to XRP’s potential bullish switch. As we discussed earlier, there is rising speculation about both parties reaching an agreement to conclude the case.
Crypto analyst Steph believes XRP is showing a strong sign of an upcoming price reversal. The analyst highlights a bullish divergence, claiming XRP may have set a firm floor at $1.89.
In a previous article we discussed, another analyst, Amonyx, projected that XRP could reach $20. He attributed this potential rise to the anticipated approval of multiple XRP Exchange-Traded Funds (ETFs).
