XRP’s futures open interest has plummeted by 54% over three weeks. Is XRP gearing up for another rally?
Since retesting the psychological support level of $2.00 on December 20, XRP has consolidated between $2.40 and $2.13 over the past week, hovering near a potential breakout in either direction.
While the high-timeframe (HTF) structure remains bullish, one analyst explains why this altcoin must secure a close above $2.30 in the short term to avoid further declines.
Buy Wall Supports XRP Up to $2.23, Says Analyst
As XRP fluctuates within a tight range, pseudonymous crypto data analyst CW highlights a strong buy wall currently propping up the altcoin.
This buy wall spans $2.20 to $2.23, and failure to hold above this zone could trigger deeper corrections. According to the analyst:
"If price holds support, XRP/USD will rally. If support fails, a drop to lower levels is likely."
Meanwhile, crypto trader Dom notes that XRP’s spot buyers are actively bidding on Kraken and Bitfinex, demonstrating relative strength compared to other crypto assets. Last week, spot market demand on Coinbase and Bitstamp helped maintain XRP above $2.20.
However, Dom cautions that XRP is "not out of the woods yet," stating:
"We need a confirmed rebound above $2.30 to consider the price action safe."
XRP Open Interest Drops 54% in 3 Weeks
Despite attracting spot market attention, XRP’s futures market tells a different story. Data from CoinGlass reveals that open interest plunged from $4.23 billion on December 3 to $1.95 billion by December 26—a 54% decline.
Such a sharp drop during the holiday season signals thinning liquidity in XRP futures, which could amplify volatility. With the asset at a critical juncture, price swings may be more pronounced than expected.
Technically, a symmetrical triangle formation reinforces this outlook. As seen on the 1-day chart, XRP’s price could break either direction, targeting liquidity pools above ($2.95, the pattern’s high) or below ($1.85, the December 1 swing low).
Key Takeaways:
- Buy Wall: $2.20–$2.23 acts as crucial support.
- Short-Term Target: A close above $2.30 is needed to confirm bullish momentum.
- Futures Market: Declining open interest may heighten volatility.
FAQ
Q: What is a buy wall in trading?
A: A buy wall refers to a large concentration of buy orders at a specific price level, often preventing further downward movement.
Q: Why is XRP’s open interest drop significant?
A: Lower open interest reduces liquidity, potentially leading to sharper price swings.
Q: What are the next key levels for XRP?
A: A break above $2.30 could target $2.95, while failure to hold $2.20 may retest $1.85.
👉 Discover how market trends impact altcoins
Q: Is XRP’s current structure bullish or bearish?
A: The HTF trend remains bullish, but short-term price action depends on holding $2.20–$2.23.
Q: How does the symmetrical triangle affect XRP’s price?
A: It signals potential breakout volatility, with equal odds of upward or downward momentum.