9h05 ▪ 5 min read ▪ by Luc Jose A.
Summarize this article with:
XRP is trying to hold the $1.30 threshold after several sessions of decline, while open interest on futures contracts remains below $3 billion. The decrease in leverage reduces the risk of cascading liquidations, but it does not yet confirm a sustained return of buyers.
In brief
- XRP is trying to stay above $1.30 after several sessions of decline.
- Open interest on futures contracts declines below $3 billion, a sign of trader disengagement.
- Reduced leverage limits liquidation risks without guaranteeing a sustained recovery.
- Sellers maintain the advantage, while flows of US XRP ETFs show signs of weakness.
- A breakthrough above $1.35 could favor a rebound, but a drop below $1.27 would expose XRP to a return towards $1.20.
XRP finds fragile support around $1.30
The Ripple token was trading near $1.31 on October 19, up about 1% over 24 hours, but still down nearly 7% over a week. It briefly touched $1.27 before rising back above the psychological $1.30 level.
The key levels to watch outline a narrow range :
- Immediate support is located between $1.27 and $1.30 ;
- A breakdown could direct the price towards $1.25, then $1.20 ;
- The first resistance is between $1.32 and $1.35 ;
- A break above $1.35 would open a test of the $1.39 to $1.40 zone ;
- The “max pain” level for the October 23 options is near $1.26.
On the hourly chart, several attempts to recover above $1.30 lacked volume. A firm close above $1.32 would improve the short-term structure, but XRP remains below several important moving averages.
The 100-day exponential moving average is near $1.34. The 20- and 50-day averages move around $1.39 to $1.41. These levels can attract sales from traders looking to exit after the recent correction.
Analyst Vuori Trading estimates that the $1.30 to $1.32 zone continues to play a central role.
He said :
The support between $1.30 and $1.32 holds. $1.39 is the next logical level.
The brief dip below this zone on Sunday requires confirmation before talking about a recovery.
Decline in open interest reflects disengagement
Open interest measures the value of futures contracts that have not yet been closed. It does not indicate whether operators are mostly bullish or bearish, since each contract pairs a buyer and a seller. However, its evolution indicates whether leverage is entering or exiting the market.
A first conclusion drawn on October 18 estimated XRP open interest at $2.77 billion, down 1.32% over 24 hours. Updated data later placed it near $2.86 billion, with about $2.14 billion daily volume on futures.
The figure of $2.77 billion is therefore not a fixed level. It corresponds to a specific moment on a constantly evolving market. The general trend remains directed towards a reduction in positions compared to the $3.1 billion observed a week earlier.
On Binance and Bybit, open interest reportedly decreased by 26.5% between September 23 and October 16. At the same time, the estimated leverage ratio on Binance fell from about 0.23 to 0.17.
When price and open interest fall together, traders generally close existing positions or undergo liquidations. This configuration differs from a decline accompanied by rising open interest, which would signal the arrival of new short sellers.
Deleveraging can therefore purify the market. It reduces the number of fragile positions likely to be liquidated during a sharp movement. However, it does not automatically create new spot demand.
Sellers keep the advantage despite a possible rebound
The ratio between immediate buy and sell executions was 0.883 on October 18. A value below 1 indicates that aggressive sellers still dominated trades. A sustained return above 1 would provide a first rebalancing signal.
Options present a more nuanced reading. The put/call volume ratio exceeded 1, reflecting more activity on bearish options. However, call options remain the majority among all open contracts.
Predictive markets also reflect a cautious sentiment. Polymarket users attributed about 50% probability to XRP reaching $1.20 before November. This estimate results from participants’ positions and is neither fundamental analysis nor a reliable price forecast.
The institutional market provides little immediate support. US XRP ETFs recorded nearly $1.84 million in weekly outflows, ending thirteen consecutive weeks of inflows. This amount remains small compared to their roughly $1.47 billion in assets under management, but it interrupts a regular source of demand.
The decline in leverage and some oversold indicators may favor a technical rebound. To turn this move into a credible recovery, XRP will need to regain $1.35 with a simultaneous increase in spot volumes. Below $1.27, the risk of a return to $1.20 would become dominant again.
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Luc Jose A.
Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.