XRP rises as crypto market steadies despite Middle East war

Institutional and retail interest steadies XRP price

Investors seeking exposure to XRP through Exchange-Traded Funds (ETFs) continue to do so despite the war-driven uncertainty in the Middle East. Over the past seven days, US-listed spot XRP ETFs have attracted inflows, with approximately $4 million recorded on Wednesday. Canary Capital’s XRPC ETF accounted for all the inflows, as activity remained muted across the rest of the products. Cumulative inflows ticked up, reaching $1.26 billion on Wednesday, up from $1.25 billion the previous day. Total assets under management hold above $1 billion, according to SoSoValue data.

Retail investors have also shown signs of returning to the market, as reflected in futures Open Interest (OI), which has risen to $2.35 billion on Thursday from $2.11 billion the previous day. Although the OI holds significantly below the record $10.94 billion reached in July, the mild increase could help shape XRP’s short-term outlook if it holds.

XRP Futures Open Interest | Source: CoinGlass

Technical outlook: XRP shows early signs of strength

XRP hovers above $1.44 as its short-term outlook turns mildly bullish, supported by a gradually increasing Relative Strength Index (RSI) at 49 on the daily chart. The Moving Average Convergence Divergence (MACD) indicator remains above its signal line on the same chart, with green histogram bars expanding. If this short-term bullish case holds, XRP could drift higher toward the 50-day Exponential Moving Average (EMA) at $1.57.

Meanwhile, a descending resistance trend line from $2.40 has repeatedly capped rebounds and still overhangs the price despite a test of the immediate resistance around $1.44. A daily close above this supply zone is needed to open the way to the 50-day EMA at $1.57 and, later, the 100-day EMA at $1.78. On the downside, immediate support lies at the daily low at $1.43. A loss of this level would expose the demand zone at $1.35, aligning with Wednesday's low.

Open Interest, funding rate FAQs

How does Open Interest affect cryptocurrency prices?

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

How does Funding rates affect cryptocurrency prices?

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

(The technical analysis of this story was written with the help of an AI tool.)