The XRP open interest dips by 30% amid whale inflows

The key takeaways

• XRP Open Interest has fallen 30% since the beginning of this year, signaling a slowdown in futures.

• A fair value gap at $2.33–$2.65 is a key demand zone if selling pressure persists.

• While the increased inflows of whales may indicate profit-taking in the short-term, XRP’s upward trajectory towards $5 in 2025 in its long-term remains unchanged.

The XRP currency (XRPFutures Open Interest (OI), has decreased The open interest has fallen by 30% in the last month. It is now $7.7 billion instead of $11 billion. Meanwhile, prices are down from their peak at $3.66. The decline of open interest is usually indicative of an increase in speculative activities, which can be attributed to either waning confidence or profit taking amongst leveraged traders.

In Q1, XRP OI fell from $8.5 to $3, a steep 65% drop, and spot prices dropped more than 50%. It is possible that traders will accumulate once OI is in a new price range.

XRP’s daily fair value range is between $2.33 to $2.65. This makes this range a likely demand area if the open interest declines. Moderation of OI is often followed by periods of stabilization in price or new accumulation phases, and historically this has provided attractive entry points for renewed rallies.

The liquidations have been relatively modest. There are only $22 Million in longs were On Monday, $56 millions were lost and on August 14, $56 during a 6% decline. In comparison to the usual washouts on overheated markets these figures show that leverage was used in a controlled manner, thus reducing any risk of escalating sell pressure.

The drop in open interests does cause caution but it leaves some room for price to bottom out. If XRP holds the $2.33–$2.65 zone, traders may interpret the cooling leverage backdrop as a potential springboard for the next leg higher, rather than a breakdown to new lows. 

Related: XRP price fails to overcome $3: Is a breakout still possible?

XRP’s whale inflows are keeping the price of XRP under pressure.

CryptoQuant Data indicates XRP’s recent rally up to $3.66 has been accompanied by significant exchange inflows, across all price bands. The largest amount of activity was from whale cohorts who held 100,000-1 million XRP. Such spikes of exchange inflows are historically associated with major market tops. For example, they occurred in 2018 at $3.66, 2021 around $1.90 and in 2023 near $0.90.

XRP has been consolidating at a price just under $3, while the inflows are still high, highlighting the near-term pressure to sell. If whales are continuing to sell, a downside risk towards the $2.6 zone of support could manifest. 

A strong defence of $3 could signal strength and set up the scene for another bullish surge. Structurally the broader uptrend of XRP remains intact. Comparing the current crypto-asset to previous cycles shows that it is in a more stable technical environment. This means long-term goals above $5 by 2025 are well within reach, despite recent volatility.

Related: Gemini flips Coinbase on app store after XRP Mastercard launch

This article contains no investment recommendations or advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.