The main dishes to remember:
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The open interest of XRP remains high despite the recent decline, suggesting that traders still occupy leverages.
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A low onchain activity on the large XRP book increases doubts about sustainable price gains above the $ 3 resistance level.
XRP (XRP) fell 15% since it reached $ 3.66 on July 18. This decision was accompanied by a drop of 2.4 billion dollars of the open interest in the long term XRP, a metric which reflects the total value of the current leverages. Traders are now afraid that the volatility of the routine market will trigger cascade liquidations, which can cause XRP below $ 2.60.
The above graph clearly shows that the lever fed the 68.7% rally between July 1 and July 18, when XRP increased to $ 3.66 against $ 2.17. The interests open to an aggregated XRP reached a historic summit of $ 11.2 billion on July 18, before falling at the current level of $ 8.8 billion, a drop of 21% in US dollars. This drop has aroused speculation that some investors may have moved their goal elsewhere.
Even measured in XRP units, the 2.82 billion current contracts represent a decrease of 12% compared to the peak. You could say that a large part of the excessive bull’s lever effect has already been eliminated, since liquidations totaled $ 325 million in the two weeks ending on July 25. However, open interests remain 48% higher a month ago in terms of XRP, leaving valid reasons for caution.
XRP’s term contracts are stable despite Retest speculation and $ 3
To assess whether whales and market manufacturers are more worrying for the support of $ 3, it is useful to analyze the prices of future monthly. Under neutral conditions, these contracts are generally negotiated with an annualized bonus of 5% to 10% compared to the punctual markets.
During last week, monthly XRP contracts regularly negotiated at a bonus of 6% to 8%, indicating that neutral feeling was not disrupted by the $ 3 retest. Above all, even if XRP has briefly exceeded $ 3.60, there was no increase in the demand for bruise leverage, reducing the risk of cascade liquidation under normal market fluctuations.
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Part of the recent optimism surrounding the XRP comes from speculation on the approval of a negotiated stock market (ETF) fund in the United States, especially after Ether (ETH) products exceeded $ 18 billion in management. Such an event could benefit several altcoins, including Litecoin (LTC), Solana (Sol) and Cardano (ADA).
However, with legitimate accumulation trends, the market was also influenced by false allegations of several banks adopting the major XRP book and a Ripple partnership with Swift, the global payment messaging system. These unfounded rumors gain ground on social networks, attracting the attention of traders despite a lack of credible evidence.
In practice, decentralized financing applications (DEFI) on the large XRP book have not yet obtained significant adoption. According to Rwa.xyz data, only $ 134 million in tokenized assets exist on the network, less than a classification among the first 10 and below 190 million dollars in avalanche.
Likewise, the decentralized exchange activity (DEX) on the large XRP book does not place it among the first 50 blockchains, according to Defillama. In comparison, the Blockchain SU has treated $ 13.3 billion in volumes of Dex at 30 days, while SEI managed $ 1.43 billion in the same period.
Even if XRP derivatives are currently reflecting neutral market conditions, traders will likely seek clear evidence of a sustained demand for the large XRP book before the price can establish a constant optimistic moment greater than $ 3.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
