XRP Price Holds $2.19 as Futures Interest Crashes 59%

• The XRP price today continues to remain solid at above $2.19 despite sharp market cooling and a reduced traders confidence.
• The open interest in futures drops by 59% as leveraged positions are unwound and it is a key indicator of a significant change in market sentiment.
• On-chain activity and whale demand are declining, but early ETF inflows keep accumulating.

Futures Traders Cut Exposure as Open Interest Falls

According to the recent data from Glassnode, XRP futures open interest has dropped by 59% since the beginning of October. It dropped to 0.7 billion XRP from 1.7 billion XRP. This is a significant decline which indicates that traders have become more cautious following the massive price movements experienced in the previous month.

Source: Glassnode

Meanwhile, the 7-day average funding rate has decreased by 0.01% to 0.001%. This shows that traders are no longer paying large fees to hold long positions. Market researcher Daniel Chung, believes that such a decline indicates that the market is transitioning into a less aggressive and more neutral and balanced structure.

Only 58.5% of the total XRP supply is in profit, the lowest record since November last year. About 41.5% of the holders (approximately 26.5 billion XRP) are currently at loss. The market is more prone to volatility spikes in case selling pressure rises.

Technical Structure Levels off as ETFs Fuel Market Confidence

The short term outlook of Ripple remains positive. According to analyst MarzellCrypto, there has been the formation of a bullish flag pattern in the 4-hour timeframe which is backed by a green Supertrend signal. The short-term structure is also supported by the fact that XRP has surged past the 23.6% Fibonacci retracement level at $2.11.

With the momentum, analysts believe that XRP will be able to test the 50% Fibonacci level of around $2.46, and it can go further to 3, provided the XRP derivatives cooldown does not extend any further.

The institutional demand is also firming up. The Grayscale XRP ETF as well as Franklin XRP ETF, both of which were launched on November 25, raised a total of over $164 million during their first day.  

Slowing Network activity and pressure on a Whale Distribution.

On-chain activity in the XRP Ledger has reduced drastically, with the number of daily active addresses declining to 19,200, compared to an astonishing 581,000 in June. This will reduce the number of users that interact with the network and this tends to slow the growth of prices.

XRP Daily Active Address. Source: Santiment

Whale wallets are decreasing too.

• wallets of 100,000-1 million XRP now occupy 9.81% of supply, compared to 10.21%.

• Wallets containing 1-10 million XRP decreased by 10.75 to 6.75 %.

Analysts caution that in case this selling persists, XRP can revisit support around $2.00 and beyond as doubts continue to mount before the next U.S. Federal Reserve policy meeting.