XRP, Open Interest at 3-Month Low...Is a 'Crash' Coming Amid Seller Dominance?

▲ XRP

XRP's futures market open interest has fallen to its lowest level in recent months, intensifying the bearish trend. Analysis suggests that sellers are in control, as investor risk appetite has weakened and new capital inflows are not apparent.

According to crypto media outlet Bitcoin.com on July 9 (local time), two analyses shared by CryptoQuant identified decreased participation in the XRP futures market and sluggish on-chain activity as bearish signals. In the first analysis, open interest decreased to $350.6 million, recording one of the lowest levels in recent months.

The analyst stated, "Market risk appetite has significantly weakened, and investors appear exhausted. Futures market open positions are decreasing, and spot market capitalization continues to shrink, meaning the XRP price trend still favors sellers." The decrease in open interest can reduce selling pressure by unwinding excessive leverage, but new demand to replace the capital that has left the market is not yet apparent.

On-chain metrics also failed to show signs of recovery. XRP's NVT (Network Value to Transaction Ratio) recorded 162.86. The analysis explained that a high NVT indicates that transaction activity on the XRP Ledger has not increased enough to support a stronger market value.

A similar trend was observed in Binance's futures market. As XRP moved around $1.09, Binance's open interest decreased to approximately 397 million XRP, falling to its lowest level in over three months. The analysis pointed out that a simultaneous drop in price and open interest can indicate weakening risk appetite and an outflow of liquidity from the futures market.

However, a decrease in open interest alone cannot definitively conclude a bearish trend; it is also possible that investors are readjusting positions while awaiting a clear market direction. While a recovery in both XRP price and open interest could signal the return of liquidity, the current indicators suggest seller dominance until capital inflows, futures market participation, and on-chain activity revive.

[Article Key Summary]

-XRP open interest decreased to $350.6 million, recording one of the lowest levels in recent months.

-XRP NVT recorded 162.86, and Binance's open interest also decreased to approximately 397 million XRP, falling to its lowest level in over three months.

-CryptoQuant analysis assessed that sellers maintain dominance until new capital inflows, futures market participation, and on-chain activity recover.

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