XRP futures on Binance surged today, with open interest jumping 14.8% to its highest level since early March. However, XRP price continues to fall, increasing liquidation risks across the market. According to CoinMarketCap data, the XRP price is now approximately $1.33, but it has been trending downward over the past several days.
CryptoQuant’s Amr Taha stated that “leverage is coming back into the XRP futures market.” However, he also noted that repeated long liquidations occur due to a lack of confidence in the bulls’ ability to withstand increased volatility.
Rising Open Interest Meets Persistent Liquidation Pressure
Liquidations have occurred repeatedly in the last few weeks. On March 18th, liquidations totaled $2.5 million. On March 21st, liquidations were valued at $2.45 million, and on March 26th, another $2.15 million was lost through liquidations.
As large amounts of funds were liquidated from long positions, the XRP price continued to experience significant and rapid declines. Open interest typically indicates larger participation in the marketplace.
Open interest has begun rising again after declining from March 17 to 24. Amr Taha notes that leverage is building without corresponding conviction on the buy side.
Hence, it is more likely that there will be a sharp price fall during market volatility. He believes that this will cause the XRP price to fall sharply when the market becomes overcrowded with long positions.
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Bearish Sentiment Grows as Short Positions Dominate
In addition to a rise in open interest, CryptoQuant reports that Binance Perpetual CVD continues to decline. This indicates that the majority of new positions created are shorts.
As indicated by both metrics, it appears that futures traders are becoming increasingly bearish. Additionally, spot market activity has decreased, as shown by the decreased purchases from retail investors.
Until upside momentum begins to emerge, traders appear more willing to build short exposure than create long exposure.
A Negative Market Sentiment
XRP is trading lower than its 20 EMA (short-term), 50 EMA (medium-term), and 200 EMA (long) on the daily timeframe, according to TradingView. The alignment of short, medium, and long-term moving averages with price action shows a continued downtrend on all timeframes.
Resistance levels are established at the 200 EMA ($1.91). Additional resistance levels exist at the 50 EMA ($1.47) and the 20 EMA ($1.40).
An RSI reading of approximately 39 suggests potential for further downside if sellers continue to dominate. MACD data also shows a bearish signal in addition to a weakening histogram. This supports declining momentum among bulls while indicating increased control by bears.
Price Action Shows Continued Selling Pressure
Price action throughout the day illustrates continued selling pressure. XRP began the day at approximately $1.37 and dropped to approximately $1.33.
Brief upward moves were not sustained, showing that buyers lacked sufficient power to establish control during the trading session. Lower highs formed throughout the trading session, illustrating continued pressure from bears. This trend aligns with derivative data illustrating increasing short exposure and weak conviction by bulls.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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