XRP Open Interest Reset: An Opportunity for Bulls to Target $3

The last two months have brought significant changes in the XRP open interest, coinciding with widespread market sell-offs. Historical data suggests that this reset could be a pivotal moment for the altcoin. As prices begin to recover, this situation might give bulls the chance to regain full control of the XRP price and potentially push it toward new heights.

Key Takeaways

XRP has experienced a significant open interest reset amidst recent market sell-offs.
The open interest has dropped to $3.75 billion, down over 65% from its peak in July.
Historical patterns suggest this reset could enable a price recovery and potentially boost XRP above the $3 mark.
Traders should monitor open interest trends and market conditions for potential price movements moving forward.

XRP

Understanding the XRP Open Interest Decline

To grasp the extent of this reset, let's examine the XRP open interest trends over the past few months. Data from Coinglass indicates that in July, XRP's open interest reached an all-time high of $10.9 billion as market participation surged to unprecedented levels.

This surge occurred alongside another reset period, which eventually propelled the price of XRP to its highest levels in seven years. However, it was not long before bearish trends entered the scene, leading to a decline in open interest as the price fell.

Open interest represents the total number of active XRP futures or options contracts, reflecting the level of market participation and the frequency of trader bets on the cryptocurrency. Thus, higher open interest suggests more capital is being invested in XRP derivatives, while lower open interest indicates the opposite.

XRP open interest
Source: Coinglass

Currently, the open interest stands at $3.75 billion, a significant decline of over 65% from its peak of $10.94 billion. However, this decline may serve as a catalyst for altcoin recovery, particularly as liquidity begins to return to the market due to the US Federal Reserve halting its quantitative tightening measures.

Is a Price Surge to New Highs Possible?

Earlier this year, when XRP's open interest fell sharply from its January heights, the reset ultimately led to increased prices. Although XRP did not surpass its 2018 peak, it came close in July. If past trends are any indication, the altcoin may take some time before experiencing another surge.

After the January crash, XRP's open interest remained low for about five months, during which the price exhibited stable performance. Given that only two months have passed since the last peak, it's possible that XRP's open interest may remain subdued for a while before experiencing a breakout. Nevertheless, if the trend continues, the resulting rally could push XRP's price beyond the $3 mark once again.