XRP bulls attempt breakout above $3 as traders reposition

XRP gains bullish momentum as Open Interest and funding rate rebound

The XRP futures market shows signs of life after several weeks of volatility. This bullish outlook is reflected by the total Open Interest (OI), which averages at $7.58 billion, up from $7.37 billion recorded on Sunday.

OI refers to the notional value of outstanding futures contracts. A steady increase implies that traders are repositioning themselves, following the correction from the all-time high, which has found support at $2.72 as of September 1.

Arab Chain, an analyst highlighted via CryptoQuant, stated that “the stabilization of OI after the peak, along with the price’s decline from its highs, indicates a repositioning phase. Leveraged positions remain in the market, but at a lower level than during the July or August peak.”

XRP Futures Open Interest | Source: CoinGlass

The steady increase in the futures funding rate to 0.0083% at the time of writing from 0.0047% on September 2 supports the bullish outlook for XRP derivatives. A steady increase in this metric suggests that more traders are leveraging long positions in XRP, thereby bolstering bullish market sentiment.

XRP Futures Funding Rate| Source: CoinGlass

Technical Outlook: Assessing XRP’s bullish structure

XRP holds above key moving averages on the 4-hour chart, including the 200-period EMA at $2.92, the 100-period EMA at $2.88 and the 50-period EMA at $2.85, signaling positive market sentiment.

A buy signal from the Moving Average Convergence Divergence (MACD) indicator, which has been in place since Sunday, supports a potential bullish outcome. This could propel XRP to a 23% breakout above its current level and reach its record high of $3.66.

XRP/USDT 4-hour chart

Traders will look for a short-term break above the $3.00 pivotal level to validate XRP’s bullish potential. However, with the Relative Strength (RSI) showing signs of retreating from overbought territory, a rejection is on the cards, which may delay the move to $3.66.

Cryptocurrency prices FAQs

How do new token launches or listings affect cryptocurrency prices?

Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.

How do hacks affect cryptocurrency prices?

A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.

How do macroeconomic releases and events affect cryptocurrency prices?

Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.

How do major crypto upgrades like halvings, hard forks affect cryptocurrency prices?

Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.