XRP continues to show strength amidst stable market volatility. Despite a decrease in open interest to its lowest level in six months, recent XRP price movements indicate a quiet build-up of bullish momentum. Various on-chain metrics, including a potential supply shock, are contributing to XRP’s strong accumulation in recent times. If the buying pressure continues to rise, there is a possibility of a 50% surge in XRP, surprising those who are only focused on the declining derivatives activity.
XRP Open Interest at 6-Month Low
Over the past 24 hours, XRP has seen a significant upward trend approaching the $2 mark. Data from Coinglass indicates that XRP witnessed over $2.37 million in total liquidations, with sellers closing positions worth $2.2 million. Short liquidations peaked after XRP surpassed immediate resistance levels around $1.8.
The recent surge in XRP price was driven by various on-chain metrics. SoSoValue data revealed that U.S. spot XRP ETFs saw net inflows of $5.58 million on Dec. 31. These funds now hold approximately $1.24 billion in total assets, with total inflows reaching around $1.16 billion.
Additionally, on-chain data suggests a supply shortage. According to Glassnode, XRP balances on exchanges have dropped to their lowest level in 8 years. Exchange-held supply has decreased to 1.6 billion XRP, down by 57% since October. This indicates that investors are moving their assets for long-term storage or custody rather than selling them.
However, trading interest in XRP has significantly declined, as indicated by the open interest data. Coinglass reports that XRP’s OI has dropped to a 6-month low, currently standing at $3.4 billion. This reduced OI could keep XRP price range-bound as volatility decreases. Consequently, a strong accumulation may be needed for XRP price to rally towards the $3 resistance level.
What’s Next for XRP Price?
Buyers are attempting to initiate 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 level, leading to a recovery towards the Fib channels around $2. Currently, XRP is trading at $1.91, with a 3.2% surge in the last 24 hours.
Currently, buyers are aiming to defend the $1.9 level. If successful, the price could rise towards the 50-day moving average around $2.04 and potentially test the $2.2 resistance level. Sellers are likely to defend this level strongly, as a clear break above it could signal a trend reversal and pave the way for a rally towards $3, resulting in a 50% increase.
On the downside, $1.8 remains a crucial support level. A drop below the ascending trend line could extend the downtrend, possibly pushing XRP towards the critical support level of $1.6.
