XRP price could break out as open interest increases
2024.06.19 12:48
Investors are increasingly betting on the XRP token’s price breakout. Could XRP be poised to see more upside momentum?
Traders increasingly betting on XRP price to rise
More traders are betting on XRP (XRP) price to rise, as reflected by the jump in open interest (OI), according to market analysis by verified CryptoQuant author Woominkyu.
He wrote in a June 18 research report:
“This trend suggests that as open interest rises alongside price, investors are opening more positions with the expectation of XRP’s price increase. This heightened interest indicates that more trading activity is occurring with XRP.”
XRP Ledger: Open Interest. Source: Woominkyu
However, the author cautioned that this could also translate into increased price volatility. He wrote:
“As open interest increases along with the price, this could reflect investor expectations and actions, but it could also bring about sudden market fluctuations, so caution is necessary.”
XRP price has been in a downtrend since the beginning of the year, down over 19% year-to-date (YTD), trading at the $0.49 mark, according to Binance data.
XRP/USDT, YTD chart. Source: TradingView
XRP’s open interest started rising on June 11 and the expectations of a breakout could be related to developments in Ripple’s case against the Securities and Exchange Commission (SEC).
On June 13, Ripple asked for a penalty of “no more than $10 million” — far lower than the regulator’s proposed $876.3 million civil penalty — citing the SEC’s settlement with Terraform labs.
“That low of a penalty would not satisfy the purposes of the civil penalty statutes,” argued the SEC in a June 14 letter to Judge Torres, A day later.
A potential settlement would come as a sign of relief for investors, considering that the pair have been in their court fight since 2020 when the SEC claimed Ripple sold unregistered securities
Related: Ethereum price to $10K is the most ‘asymmetric bet’ in crypto — Analyst
Is XRP’s price on track for a breakout?
The XRP token could be on track for a price breakout until the end of June, based on a key technical chart formation.
On the daily chart, XRP has formed a descending triangle, a chart pattern that could signal a potential price breakout as the wedges of the triangle narrow. This can spark an XRP price rally if it can hold above the $0.47 support mark.
XRP/USDT, 1-day chart. Source: TradingView
XRP fractals also hint at a potential breakout, as long as the price chart repeats the patterns that emerged following February 2024, when XRP price broke out of a similar ascending triangle pattern.
Fractal patterns are used by technical traders to identify key support and resistance levels and potential trend reversals, based on historical data.
XRP/USDT, fractals chart. Source: TradingView
At the same time, traders must consider potential negative news related to the SEC vs Ripple lawsuit that could hurt the market, potentially sending the XRP price below its current support.
Related: Bitcoin price ‘clusters’ hint at more downside: Is BTC about to lose $64K support?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
