The post XRP Price Action Hints at 50% Upside Despite Open Interest at 6-Month Low appeared first on Coinpedia Fintech News
XRP is showing signs of strength even as market volatility remains muted. Despite open interest dropping to its lowest level in six months, recent XRP price action suggests bullish momentum is quietly building. Several on-chain metrics including potential supply shock are the reasons behind XRP’s strong accumulation in recent hours. If buying demand continues to surge, it raises the possibility of a 50% rally for XRP, surprising those focused only on declining derivatives activity.
XRP Open Interest at 6-Month Low
Over the last 24 hours, XRP has seen a strong upward trend as it neared the $2 mark. Data from Coinglass shows that XRP recorded over $2.37 million in total liquidation, of which sellers closed $2.2 million worth of positions. Short-liquidation peaked after XRP broke above the immediate resistance channels around $1.8.
The recent surge in the XRP price was triggered by several on-chain metrics. Data shared by SoSoValue showed that U.S. spot XRP ETFs recorded net inflows of $5.58 million on Dec. 31. These funds now hold around $1.24 billion in total assets, with total inflows reaching about $1.16 billion.
Also read: Ripple News: Is an XRP Supply Shock Really Coming? Experts Take
At the same time, on-chain data is hinting at a supply squeeze. According to Glassnode data, XRP balances on exchanges have dropped to their lowest level in 8 years. Supply held on exchanges has fallen to 1.6 billion XRP, down by 57% since October. It suggests that investors are moving their assets for long-term storage or custody rather than putting them to be sold.
However, trading interest in XRP has significantly dropped, as revealed by the open interest data. Coinglass shows that XRP’s OI dropped toward a 6-month low, currently sitting at $3.4 billion. Reduced OI might keep XRP price trapped within a tight region as volatility drops significantly. As a result, XRP price might require a strong accumulation to record a rally toward the $3 resistance.
What’s Next for XRP Price?
Buyers are trying to spark a recovery in XRP by pushing the price above its 20-day moving average near $1.92 on the 1-hour chart. Bulls successfully defended the $1.8 support line, resulting in a recovery toward the Fib channels around $2. As of writing, XRP price trades at $1.91, surging over 3.2% in the last 24 hours.
Currently, buyers are attempting to defend the $1.9 level. If they manage to do that, the price could move higher toward the 50-day moving average around $2.04 and later test the $2.2 resistance level. Sellers are likely to strongly defend that level, as a clear break above it could signal a shift in trend and open the door for a rally toward $3, resulting in a 50% surge.
On the downside, $1.8 remains a key support. A drop below the ascending trend line could extend the downtrend, potentially pulling XRP down to the critical support level of $1.6.
