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XRP price opened trading at $0.51 on April 29, reflecting a 12.5% decline in seven days, but a rare $40 million signal in the derivatives market offers a glimmer of hope for bulls in the week ahead.
XRP Open Interest Holds Steady Amid 12.5% Price Dip
On Monday, April 29, XRP price briefly stumbled below the $0.50 psychological support for the first time in 10 days, before bulls swooped in to avert further losses.
Similar to XRP, top-ranked crypto assets such as BTC and ETH, and SOL have all struggled for momentum in the last two weeks. But after the latest 12.5% downswing, bullish speculative traders now appear to be potting an XRP price rebound mission behind the scenes.
Coinglass’ Open Interest metric tracks the nominal value of total active futures contract listed for a cryptocurrency across recognized trading platforms.
Within the 7-day timeframe dating back to April 22, XRP open interest has shrunk by $40 million, reflecting a 7% decline from $562 million to $522.36 million at the time of writing on April 29.
At first glance, a 7% decline in open interest over the past week appears bearish, but when compared to the 12.5% price dip during the same time period, it offers deeper insights.
Typically, when open interest declines at a slower pace than prices during a market dip, as observed in the XRP markets over the past week, strategic traders could interpret it as early signal of an imminent bullish rebound for two key reasons.
First, a slower decline in open interest suggests that traders are not rushing to exit their positions despite the price drop. This behavior may indicate that investors remain confident in XRP’s long-term prospects and are willing to hold onto their positions, anticipating a potential recovery in prices.
Secondly, it may also suggest that sellers are becoming exhausted. With fewer market participants willing to take short positions or sell their holdings at lower prices, the drop-off in selling pressure could pave the way for a bullish reversal as buyers step in to capitalize on discounted prices.
XRP Price Forecast: Imminent Rebound to $0.60
Drawing insights from the positive divergence observed between the price trend and open interest, XRP looks set to rebound toward $0.60 in the coming weeks.
However, looking at the Bollinger band technical indicator, any XRP price recovery mission in the near time could face turbulence at the $0.53 territory. But if that 20-day SMA resistance sell wall caves, XRP price could enter a parabolic breakout toward $0.60 as predicted.
On the contrary, XRP price stands the risk of a sliding towards $0.45 if the selling pressure heightens in the days ahead. But in this scenario, the bulls will likely make concerted efforts to regroup around the psychological support cluster $0.50, to avoid booking another wave of double-digit losses.