XRP Price Forecast: Will a recovery in open interest push XRP to all-time highs?
Ripple (XRP) price offers signs of consolidating slightly above support at $3.00 on Monday. While the token’s technical structure leans largely bullish, profit-taking is dampening the uptrend. Sentiment is likely cooling in the broader cryptocurrency market following a significant breakout in the prices of Bitcoin (BTC) and Ethereum (ETH) toward the end of last week.
The cross-border remittance token reacted positively to the news that Ripple and the United States (US) Securities and Exchange Commission (SEC) had filed a joint motion to dismiss appeals, paving the way for the resolution of the five-year legal battle. Ripple will pay $50 million in settlement fees out of the $125 million held in escrow.
XRP flaunts a bullish derivatives market
XRP price recovery is happening in tandem with the futures Open Interest (OI). CoinGlass data shows that OI, which refers to the notional value of outstanding futures or options contracts, edged higher and averaged at $8.5 billion on Monday. This represents a 17% increase from $7.05 billion recorded on August 3.
A subsequent increase in the futures weighted funding rates to 0.0108% from 0.0004% over the same period suggests that more traders are leveraging long positions in XRP.
The increase in trading volume to $12.64 billion as OI and funding rates recover points to expanding market activity.
In spite of possible profit-taking after the macro-driven breakout last week, XRP is consolidating above the resistance at $3.40 and its $3.00 support. Growing interest in XRP may drive the price closer to the July 18 record high of $3.66 if the bullish trend in the futures market continues.
Technical outlook: XRP consolidates before breakout
The price of XRP remains between the $3.00 support and the $3.40 resistance. More money is moving into XRP, according to the Money Flow Index (MFI), which has rebounded just above 40.
As demand in the cross-border money remittance token grows, a breakout can be expected if the derivatives market mentioned above keeps recovering.
The 50-day Exponential Moving Average (EMA) is at $2.88, the 100-day EMA is at $2.66, and the 200-day EMA is at $2.39. These are all upward-trending moving averages.
These levels might act as provisional support to withstand selling pressure and stop XRP from falling toward the $2.00 level in the case of a notable recovery below the $3.00 support.
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