XRP Markets Have Steadied after $75M Liquidations in Two Weeks After rejecting at the monthly peak of $0.72 on November 6, the XRP price experience
XRP Markets Have Steadied after $75M Liquidations in Two Weeks
After rejecting at the monthly peak of $0.72 on November 6, the XRP price experienced intense volatility. Following two consecutive losing weeks, XRP markets steadied as the general sentiment flipped bullish again on Thursday. Derivatives market data trends paint a clear picture of how the bulls regained control of the market.
According to derivatives market tracker Coinglass, XRP perpetual futures traders had endured liquidations worth $75 million in 16 days between November 6 and November 22. Mathematically, this works out to an average of $4.7 million positions wiped out daily during that period.
A close look at the chart below shows that the LONG (bullish traders) took the largest hit. However, since the market flipped bullish on Thursday, Liquidations have reduced significantly, with only $3 million positions erased in the last 3 days combined.
Liquidations, in the context of derivatives trading, refers to the number of positions, both LONG and SHORT, that have been closed during a given period. Liquidation occur due to various factors such as margin calls, adverse price movements, or other risk management measures.
The chart above shows a substantial decrease in the value of liquidated XRP contracts in the last 3 days. This indicates that the XRP market has stabilized, and that traders are now in a consolidation phase after a long period of majorly bearish volatility Hence, this could encourage new entrants to bring in fresh capital into the markets in anticipation of a bullish reversal.
Investors have Brought in $88 Million in Fresh Capital Inflows
Amid the positive XRP price performance in the spot markets, investors in the derivatives markets are taking on bullish disposition. This further confirms that XRP traders are anticipating a bullish reversal.
According to Coinglass, XRP Open Interest jumped about 13% between November 20 and November 24. As depicted below, it increased from the monthly low of $584.60 million to hit 671.4 million, at press time on Friday.
Open Interest quantifies the total capital invested in active perpetual futures contracts for a specific crypto asset. Typically, an increase in Open Interest is a bullish signal. It indicates that more investors are bringing capital into the markets than those closing out their positions.
However, while there has been a 13% increase in open interest, the price has only risen by 6%, moving from $0.58 to $0.62. This is an indication that market participants are showing confidence in the current price uptrend by entering more positions.
XRP Price Prediction: Can the Rally Reach $0.70 ?
Having defended the $0.60 territory, the $88 million capital inflows recorded in the last 72 hours puts XRP price on an upward trajectory.
In the daily time frame, Bollinger Band technical indicator also suggests that XRP price will enter a leg-up toward $0.70. As seen below, at $0.62, XRP is trading below the middle band or simple moving average of $0.64.
This alignment suggests that XRP is still far from entering overbought territory. Traders often interpret this as a bullish signal, as it may suggest that XRP is in good stead for further upswing.
However, the bull could face significant resistance at the upper Bollinger band of $0.70. A decisive breakout above that range could see XRP price claim a new 2023 peak.
On the downside, the bears could negate that XRP price prediction if they successfully force a downswing below $0.55. However, the support buy-wall around the lower Bollinger band of $0.57 area will likely prove daunting.
amp.fxempire.com
COMMENTS