Analyst Highlights a Crucial Price Signal for XRP Traders

crypthub

about 8 hours ago

Market Overview

XRP has slipped ~28% YTD, now around $1.32. Futures open interest fell to $2.3 bn, showing less speculation. Analysts view open interest as a participation gauge, not a price driver.

Historical Pattern

Open interest usually climbs in strong rallies and falls in corrections. 2021’s rise to $2 saw OI rise to $2 bn; post‑2024 election rally to $3.40 paired with OI near $7.8 bn. Mid‑2025’s jump to $3.60 coincided with a record $10.9 bn OI before both receded.

Mechanics of Open Interest

Higher prices lead traders to add leveraged spots, boosting OI and liquidity. Rapid OI spikes can flag excess leverage and higher correction risk. Dollar‑based OI reporting may exaggerate activity when prices rise.

Current Implications

The ongoing decline and falling OI suggest limited speculation, not buying. A true recovery would need price stability plus a sustained OI rise. Thus OI is a useful supplement, not a sole forecast tool.