XRP Token’s Open Interest Skyrockets to $1 Billion, But Will It Spark a Bullish Breakout?

XRP token’s Open Interest has skyrocketed to $1 billion, raising questions about what’s fueling the recent surge.

XRP token’s Open Interest has hit the $1 billion mark, sparking curiosity about the recent surge. Amidst growing speculation over regulatory clarity and an uptick in institutional interest, XRP is garnering attention once more. But is this sufficient to ignite a bullish breakout?

At press time, XRP was trading at $0.5879, reflecting a 6.50% decrease over the last 24 hours. Nevertheless, the hike in Open Interest highlighted an increase in activity across the market. By extension, this uptick suggested that traders are betting on significant future price movements.

This makes it essential to examine what’s driving the altcoin’s momentum. Regulatory developments and institutional investments are likely key factors, but is there something else going on too?

XRP’s price action – Key levels to watch

Observing the charts, the press time price action showed the token encountering stiff resistance at $0.6222. This level has served as a critical barrier for any bullish advance. On the other hand, a strong support lay at $0.5617, providing a cushion if bearish pressure increases on the charts.

The Bollinger Bands seemed to be tightening, suggesting an imminent price move. Moreover, the RSI at 56.94 highlighted neutral market conditions.

Therefore, traders should keep a close eye on these levels, as breaking resistances could trigger a more significant price rally.

Source: TradingView

Exchange reserves – Could selling pressure rise?

In this regard, it’s also important to note that exchange reserves rose by 0.34% to reach 3.1258 billion tokens over the last 24 hours. Such a hike often points to higher selling pressure, especially as more tokens are transferred to exchanges for potential liquidation.

As a result, investors should be cautious. Despite the recent uptick in market interest for XRP, the rising reserves indicate that some holders may be preparing to sell.

Source: CryptoQuant

XRP liquidations – Are long positions at risk?

Lastly, a glance at the liquidations revealed that over $1.35 million has been liquidated in the last 24 hours, predominantly from long positions. On Binance alone, long liquidations totaled $323.77K.

In essence, as the market resists a breakout, over-leveraged positions are being unwound, highlighting the potential risk for bullish traders if the altcoin fails to maintain its momentum.

Source: Coinglass

Read Ripple’s [XRP] Price Prediction 2024-25

Conclusively, the surge in Open Interest, paired with growing institutional and retail involvement, indicates bullish potential.

However, the rise in exchange reserves and long liquidations underlines the need for caution. While breaking above $0.6222 will be key for any sustained rally, traders should prepare for volatility as the altcoin navigates these critical levels.