XRP/USD (Ripple) appears to have arrested its steep decline today with the cryptocurrency bouncing from just below the psychological $3.00 handle. Ripple dropped as much as 19% from its fresh all-time high around the $3.65 mark to a low of $2.96 earlier in the day.
However, the move proved short-lived as bulls returned to the party, pushing XRP/USD back above the $3.00 to trade around $3.21 at the time of writing.
Interest in XRP on the derivatives market is cooling off after a recent spike in futures Open Interest (OI) to $10.94 billion, the highest this year. According to Coinalyze, all Open Interest is down around 9% in the last 24 hours.
The drop in XRP’s price also led to $62.5 million in liquidations over the last 24 hours. Most of these losses came from long positions, which accounted for about $51.3 million, while short positions saw $11.2 million in liquidations.
Source: Coinalyze
Open Interest (OI) is an important metric in the derivatives market because it shows the total number of outstanding contracts (like futures or options) that have not been settled or closed. It gives traders and investors insight into the level of activity and interest in a particular asset.
Falling Open Interest (OI) means traders are closing their positions, which could suggest uncertainty, taking profits, or declining interest in the asset. This is no surprise as many market participants may have taken profit once fresh all-time highs were reached on July 18.
Since July 17, Ripple co-founder Chris Larsen has transferred 50 million XRP, worth about $175 million, to exchanges, according to blockchain investigator ZachXBT. Social media users are criticizing the 65-year-old Silicon Valley executive, accusing him of insider trading with Ripple.
In a post on X (formerly Twitter), ZachXBT revealed that the XRP was sent to four different wallet addresses, with around $140 million of it ending up on exchanges or services. This news has caused XRP’s price to drop over 9% in the last 24 hours, now trading at $3.21 during Thursday’s US session. Ripple’s token had fallen 19% from its all-time high of $3.65.
ZachXBT’s investigation shows that three wallets received 30 million XRP combined, while a fourth wallet got 10 million XRP. Two newly activated wallets were also credited with 5 million XRP each, totaling 50 million XRP moved in less than a week.
When asked how much XRP Larsen still holds, ZachXBT said the wallets still control over 2.81 billion XRP. At the current price of $3.11 per token, this is worth $8.7 billion, which is about 4.6% of XRP’s $183 billion market cap.
These transfers happened just after XRP hit a local high of $3.60 last Friday before dropping below $3.10. The price drop, partly blamed on the selloff, has led to accusations that Larsen is profiting by selling at XRP’s peak and “dumping” on retail investors.
Looking at the big picture, though, one would expect whales to at some point cash out some of their holdings when fresh all-time highs are being made.
From a technical standpoint, XRP/USD made a brief foray below the psychological $3.00 handle before bulls stepped in.
The RSI period-14 has left overbought territory, which is a sign of a shift in momentum.
However, the daily candle may still hold the key; a hammer candle close on the daily timeframe could be a sign that bullish interest remains strong.
We also have a golden cross pattern, which came to fruition on Tuesday as the 50-day MA crossed above the 200-day MA. This is a sign of bullish momentum despite the golden cross being a lagging indicator in many ways.
This leaves market participants a bit undecided, as the RSI hints at a rise in bearish momentum while the golden cross hints at bullish momentum.
Immediate support rests at $3.05 before the psychological $3.00 handle comes into play. The daily low at $2.96, if broken, could lead to further downside with a trendline retest not completely out of the question.
Resistance may be found at $3.39 with a break above looking toward the $3.50 before the ATH at $3.65 comes back into focus.
