XRP (Ripple) Expected to Explode if it Exceeds $1.18... Were We Fooled by a 'Fake Bearish Trend'?

▲ XRP/AI-generated image

As XRP rises despite a decrease in open interest, an unusual structure where short position liquidations push up the price is attracting market attention.

According to crypto-specialized media CryptoPotato on July 4th (local time), XRP's price has been rising moderately in recent days, while open interest has been decreasing. This trend typically indicates a contraction in market participation, but with the net position delta rising alongside it, different signals are emerging in the derivatives market.

According to an analyst's review, the recent uptrend is driven more by the closing of short positions than by aggressive new buying. The analysis suggests that bearish investors are exiting the market, and short-covering pressure has pushed up XRP's price. However, for a sustained rally to continue, new buying with strong conviction must enter the market.

A decrease in open interest means that new leverage is not building up but decreasing, which is interpreted as a sign of weakening market conviction. XRP closed the previous day's trading with a bullish trend, but it needs to maintain this momentum to avoid being pushed back into a bearish zone. Accordingly, an attempt to break the $1.13 resistance level has emerged as a crucial point to watch.

The key variable the market is focusing on is the simultaneous rise in open interest and net position delta. If both indicators rise concurrently, it signals a shift in market structure from an uptrend driven by short position closures to one centered on new long position entries. CryptoPotato analyzed that if such a change occurs, the pace of XRP's rise could accelerate further.

During intraday trading, XRP is showing high volatility and remaining within a box range. If it breaks above $1.18 and holds that price level, an opportunity for strong buying pressure to return could open up. Market signals indicate that selling forces are easing, while the full-fledged entry of buying forces has not yet been confirmed.

[Article Key Summary]

-An uptrend driven by short position closures has been observed, with XRP price increases occurring simultaneously with a decrease in open interest.

-If open interest and net position delta rise together, it could signal an acceleration of the uptrend due to new long position entries.

-For XRP, whether it breaks the $1.13 resistance and holds the price after surpassing $1.18 is a key point to watch.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*