The data shows that XRP does currently exhibiting intriguing supply chain behavior in the face of broader market uncertainty. This unusual behavior was highlighted by CryptoQuant, an on-chain cryptocurrency analysis company. This peculiar behavior is noteworthy because it is related to the growing interest in XRP in comparison for other cryptocurrencieswhich suggests that XRP is poised for a major price move.
Increased interest in open XRP transactions
According to CryptoQuant data initially noticed by an analyst associated with the analytical platform, latest news regarding The SEC and Ripple, the parent company of XRP, have seen interest in XRP return to an upward trend.
As you can see in the CryptoQuant chart below, open interest, which has been generally on an upward trend since April 15, recently peaked in the first week of June and has started to decline in parallel with the decline in the price of XRP. However, open interest has now rebounded and returned to an upward trend.
Interestingly, this boost is more significant than for other cryptocurrencies, considering that prices of many cryptocurrencies have struggled in the last week. The growing interest in open positions also reflects the current sentiment among XRP investors, as it indicates that investors are opening more positions in anticipation of the XRP price rising.
How will this affect the price?
Open interest refers to the total number of outstanding derivatives contracts. Increasing open interest often signals more money flowing into the market. This is clearly evident in the chart above, as increases in open interest were mainly recorded with a corresponding boost in the price of XRP.
Moreover, for many experienced investors, the number of open positions is considered a leading indicator. When it rises, it signals that up-to-date money is flowing into the market as investors open up-to-date positions. This increased activity and liquidity can herald the future direction of an asset’s price. No matter what direction the price goes, one outcome is almost certain: greater volatility.
At the time of writing, the price of XRP is $0.486 and has increased by 1.44% in the last seven days. Despite this slight boost, it is worth noting that XRP is currently the only asset among the top 20 cryptocurrencies that was still in the green zone last week. Adding to bullish prospects that’s a lot of trading volume over the last few days.
According to Santiment data, some investors are still bearish on XRP even though it is currently outperforming many other assets. XRP also means traders shorting to counter bulls. However, as – Santiment notedthis is a good sign for patient bulls as shorting can act as “rocket fuel”. further price increases when they will finally be liquidated.
Featured image created with Dall.E, chart from Tradingview.com
