- XRP open interest surged by 40% in the past 24 hours.
- Buying pressure across exchanges and investment products helped XRP to maintain a bullish outlook.
- XRP could be on the verge of a massive breakout after testing the resistance of a bullish pennant.
Ripple's XRP trades near $2.40, up 1% on Monday following a 40% surge in its futures open interest. The surge could help the remittance-based token overcome the key resistance of a bullish pennant pattern.
XRP on-chain activity indicates rising bullish momentum after open interest surge
XRP futures open interest witnessed a spike on Monday, rising by over 40% from 1.09 billion XRP to 1.53 billion XRP. Open interest is the total number of unsettled contracts in a derivatives market.
XRP Open Interest. Source: Coinglass
The recent spike in open interest amid flat prices indicates the inflow of new liquidity to fuel XRP's bullish bias, especially with Donald Trump's upcoming inauguration on January 20. However, prices sometimes tend to move in the opposite direction when bullish expectations are very high.
XRP exchange net flows also indicate a slight bullish bias in the past week, thanks to higher buying pressure from Binance, OKX and Bybit investors, which posted combined net outflows of $91.81 million. However, US-based investors were bearish, as indicated by the net inflow of $76.53 million into Coinbase.
XRP Exchange Flows. Source: Coinglass
Meanwhile, XRP investment products recorded positive flows last week, as it was the only major crypto asset without a negative flow. The products posted $5.7 million in net inflows, the highest across all digital assets investment products, per CoinShares data.
Inflows in crypto ETFs/investment products represent buying activity, and vice versa for outflows. However, in crypto exchange flows, inflows represent selling activity and vice versa for outflows.
XRP could post a massive rally with a break above bullish pennant resistance
XRP saw $3 million in futures liquidations in the past 24 hours, with long and short liquidated positions accounting for $1.72 million and $1.28 million, respectively, per Coinglass data.
XRP is on the verge of validating a bullish pennant after testing the pattern's upper boundary resistance for the second time in the past three days. If XRP posts a high volume move above this resistance, it could rally to a new all-time high near $4.78.
XRP/USDT daily chart
However, it could encounter key hurdles at its all-time high of $3.55 and near the resistance below the $3.00 psychological level.
If XRP continues seeing a rejection at the upper boundary of the pennant, it could find support at its lower boundary near the 50-day Simple Moving Average (SMA).
The Relative Strength Index (RSI) momentum indicator is above its neutral level, signaling dominant bullish momentum. Meanwhile, the Stochastic Oscillator (Stoch) is slightly in the overbought region, indicating XRP may see a moderate correction.
A daily candlestick close below $1.96 will invalidate the bullish thesis and send XRP toward $1.35.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
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