XRP Open Interest Drops by $1 Billion as Traders Grow Skeptical of Price Explosion
Price DAA divergence signals bear market: stagnation and falling participation below 2.73% resistance
XRP could dip below the $2.00 support but could target a new all-time high at $3.31 if market conditions are favorable. XRP has been experiencing price stagnation below the key resistance level for the past month, frustrating investors as the altcoin struggles to gain upward momentum.
This prolonged stagnation has shaken the confidence of traders and many have chosen to step back due to the lack of significant price growth.
Open Interest (OI) in XRP futures has fallen by $1 billion in the last 24 hours, indicating that traders’ confidence is waning. The day before, OI had risen to $2.9 billion on expectations of a price increase. However, when these hopes failed to materialize, traders began to withdraw their investments.
This sudden decline suggests that interest in XRP is waning and the bearish trend is strengthening. This decline in OI highlights the growing doubts about XRP’s ability to break past current resistance levels, which could further limit market activity in the short term. XRP’s macro trend is also weakening, with the price signaling sell signals reflecting DAA divergence, declining participation, and stagnating price action. This could lead to further price declines as traders begin to take profits.
If the selling pressure increases, XRP is likely to struggle further. The declining participation and indecisive investors could hinder the altcoin’s recovery and keep the price in a lull. XRP has lost 20% in the past month, but has managed to stay above the $2.00 support level without falling below it. Despite this, the altcoin continues to consolidate below the critical resistance at $2.73, failing to break out of this level and start a rally.
If the downtrend continues, XRP could risk losing the $2.00 support and enter a consolidation phase. Such a scenario would further undermine investor confidence and put additional downward pressure on the price, prolonging the current recession.
On the other hand, if the overall market conditions improve, XRP could potentially rally to $3.31 after breaking the $2.73 resistance level. Reaching this level would invalidate the current downtrend and start a new uptrend, which could prompt more investors to enter the market.