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XRP added almost 20% in open interest on MEXC, which could be a double-edged sword for the price of the asset. Across all exchanges, open interest went up by only 0.86%, reaching $2.25 billion.
XRP is not benefiting directly from an increase in open interest; it could reflect an increase in futures positions.
Are futures bullish?
Futures by themselves are a source of strong volatility and liquidity for assets. Considering the state of the market, XRP's increase in open interest is not unexpected.
Over the past 24 hours, $18.83 million in XRP positions were liquidated, with longs making up 94%.
Futures could be opened by speculative traders who are trying to catch a falling knife. The data, however, suggests that most of the new positions are shorts, as the price went down while open interest went up.
XRP is currently trading at $1.02, down 1.46% over the past 24 hours. The price is approaching the $1 price threshold, and it might be the level where the recovery should finally happen.
Realistically, the closest 'fair' support is the $1 price level, both psychological and technical.
XRP already dipped to $0.9961 earlier today before going back above the threshold. A cluster of long liquidations sits right below that level.
XRP is teetering on the edge of the $1 threshold, which, if broken, essentially enables a rapid decrease.
Funding rates improve
Funding rates also tilt towards bulls, and there is a good chance we are going to see stabilization and then a recovery. The funding rate sits at 0.0080%, slightly below the 0.01% base, so the tilt is rather small.
In addition, US spot XRP ETFs recorded zero net flows on November 12.
Unfortunately, volume shows an uptick, a direct sign of increasing pressure on the asset. Spot volume went up by 46.7%, with sellers outweighing buyers by $48.2 million.
It is not a guarantee of a bearish market strengthening, but it shows that sellers are there and ready to push the price lower. Whether buyers can defend the $1 level or not is the main test for the asset right now.