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Amid a spike in $XRP Open Interest (OI) and rising bearish derivatives bets, spot CVD has increased $62 million as real buyers enter the market.
Notably, $XRP has had a hard time finding stable ground. The price got a brief lift after the Israel-Iran conflict escalated on Feb. 28, climbing to a high of $1.47 by March 4. But that gain did not last, as $XRP fell back to a weekend low of $1.32 before recovering slightly to $1.38, still down 24.92% so far this year.
Amid the uncertain price action, derivatives and spot data show leverage traders have started aggressively betting against a price recovery while actual buyers enter the market, a development that could potentially lead to a bullish reaction.
Key Points
- $XRP climbed to a high of $1.47 by March 4 following the Israel-Iran conflict escalation, before correcting to $1.32 and rebounding to $1.38.
- Data shows $XRP’s Open Interest on Binance jumped by $15 million on March 9, indicating that leverage traders are actively opening new positions.
- The Binance Perpetual CVD sits deeply negative at around -$2.75 billion, confirming that aggressive selling pressure continues to dominate the derivatives market.
- Spot market data tells a different story, with the Binance Spot CVD growing by approximately $62 million between March 4 and the time of the report, reflecting real buying interest from spot traders.
- The rising Open Interest and deeply negative Perpetual CVD historically point to an overcrowded short side, raising the chances of a short squeeze or temporary price bounce.
Leverage Traders Start Taking Big Positions in $XRP
Amr Taha, a verified analyst at CryptoQuant, recently confirmed this trend in his latest market exposition. According to him, leverage traders have started aggressively building positions in $XRP.
Taha pointed out that even though the overall market mood remains mixed, data coming out of Binance shows a battle between real buyers and speculative traders looking to profit from price swings.
Taha based his analysis on three important indicators tracked on Binance. The first is the $XRP Open Interest, which reflects the total value of all active derivatives contracts currently open in the market.
Meanwhile, the second is the Perpetual Cumulative Volume Delta (CVD), which measures the running total of buying and selling pressure in perpetual futures contracts. He identified the third indicator as the Spot CVD, which tracks the same buying and selling pressure but within the spot market.
$XRP OI Spikes $15M While Spot CVD Jumps $62M
Specifically, the market analyst revealed that on March 9, $XRP’s Open Interest on Binance jumped by $15 million, moving from $210 million up to $225 million.
Interestingly, at the same time, the Binance Perpetual CVD sits deeply in negative territory at around -$2.75 billion. Meanwhile, the Binance Spot CVD grew by about $62 million between March 4 and 9. These figures show how traders on both the derivatives and spot sides are setting themselves up around $XRP right now.
Taha concluded that rising Open Interest and a deeply negative Perpetual CVD have historically pointed to a market where derivatives traders are heavily betting on further price drops. However, with Spot CVD seeing a notable increase, actual buyers in the spot market could be entering the scene.
Possible Short-Term Price Implication for $XRP
Notably, when rising Open Interest occurs with a deeply negative Perpetual CVD during a market decline, it raises the chances of a short squeeze or a temporary price bounce, even when selling pressure remains strong.
Rising Open Interest during a downturn means traders are opening fresh short positions. A highly negative Perpetual CVD adds to this trend by confirming that heavy selling, through market sell orders pushing down on bids, is driving the current price action.
When both of these conditions show up, it means the short side of the market is getting too crowded. If the price stops falling or ticks slightly higher, short sellers may begin unwinding their positions on their own or get forced out through liquidations, creating buy pressure that can drive the price up quickly.
This kind of situation often catches late sellers who entered after the main move had already happened, and leaves the market open to a sharp counter-move or a liquidation-driven spike before the broader downtrend picks back up.