XRP News Today: XRP Open Interest Surges to $3.9B, Falls to $3.08B as 50.77% Shorts Signal Bearish Bias

XRP’s open interest surged to a record $3.9 billion earlier this week before rapidly declining to $3.08 billion, signaling intense speculative activity despite the token’s consolidation between $3.00 and $3.20 over four days [1]. The imbalance in derivatives trading—short positions accounted for 50.77% of XRP futures—highlights growing bearish sentiment, yet this imbalance could backfire into a short squeeze if prices unexpectedly reverse upward [1]. Exchange netflows for XRP remained positive for two consecutive days, with inflows of $1.28 million at press time, suggesting heightened selling pressure as traders prepare to liquidate positions [1]. Analysts note that while the current consolidation reflects a tug-of-war between short sellers and profit-taking, the outcome hinges on whether capital inflows sustain upward momentum or if downward selling pressure overwhelms bullish bets [1].

The surge in open interest on Binance’s derivatives market, tracked by CryptoQuant, underscores the heightened stakes in XRP’s price action. A rising open interest during sideways trading typically precedes a liquidity-driven breakout, either bullish or bearish. However, the dominance of short positions—reflected in CoinGlass’s long/short ratio of 0.96—indicates a structural bias toward further declines. This dynamic creates a paradox: shorts are positioned to profit from a drop toward $2.90, but a minor reversal could trigger a short squeeze if longs capitalize on oversold conditions [1].

AMBCrypto’s analysis highlights the dual scenarios shaping XRP’s near-term trajectory. If capital inflows into futures persist, the token could breach the $3.2 threshold and reclaim the $3.5 resistance, triggering large-scale liquidations for short positions. Conversely, sustained profit-taking by sellers could deepen the correction to $2.90, wiping out long positions as bearish bets gain traction [1]. The market’s behavior at critical levels like $3.2 will likely depend on the balance between short-covering demand and the willingness of buyers to absorb selling pressure.

The current data paints a precarious picture: while elevated open interest and bearish positioning suggest a high probability of volatility, the direction remains uncertain. Traders are advised to monitor derivatives flows and exchange netflows as real-time indicators of sentiment shifts. A break below $3.2 would likely confirm a bearish bias, whereas a sustained rally above $3.2 could force shorts to cover, amplifying upward momentum. The key variable is the persistence of capital inflows into futures, which could either stabilize demand or exacerbate liquidation risks depending on price direction [1].

Source: [1] [XRP Open Interest hits $3.9B, then drops fast: What happens if $3.2 breaks?] [https://ambcrypto.com/xrp-open-interest-hits-3-9b-then-drops-fast-what-happens-if-3-2-breaks/]