The funding rate of the XRP fell to the levels seen when the last token was in $ 0.33. Popular crypto analyst Cryptoinsight, drawing attention to this similarity, traders look hesitant and said that the open interest remained low. According to the analyst, if the rise momentum occurs, a ‘Short Squeeze’ may trigger the next XRP price increase.
What do the funding rates show for OI and volume for XRP?
The analyst called Cryptoinsight Hakma shared a graph, emphasizing that the funding rate of XRP is low. The funding rates show the cost required to keep leveraged positions in continuous futures contracts. Negative rates typically indicate that short positions (those who expect a price decrease) dominate the market. Because Short positions need to pay for long positions.
As can be seen in the graph, the XRP OI value is around 591 million Coin (about $ 1.18 billion). This is a relatively low level compared to the past peaks during the powerful trends. This low OI indicates that many investors probably expect a clearer market direction before investing a significant amount of capital.
The spot market volume, which is recorded around 107 million coins per day, remains low. Thus, it points to the cautiousness between the participants. Kriptokoin.comAs you have followed, the price of the XRP reflected this general pressure and fell by 14.5 %last week.
Stock market data gives mixed signals!
Coings’ latest data show that the volume of the XRP’s derivative market decreased by 17.62 %to $ 7.12 billion, and the open interest rate decreased by 3.67 %to $ 3.56 billion. However, the option volume increased by 120.23 %to $ 7,500. In addition, the option open position increased by 146.96 %to $ 983,490.
These figures emphasize a mixture of increasing interest of the activity, which is decreasing in constant futures. Thus, it shows that traders may be positioned for potential fluctuation.
Can negative funding rates trigger the ‘Short Squeezeeeze for XRP?
A potential ‘Short Squeeze’ continues to be an important scenario. If the XRP gains an upward momentum, traders with Short position can accelerate a break by having to reimburse higher prices. This model historically led to sharp price increases in the crypto market.
Wider market sensitivity continues to be a critical factor for XRP. The price movement will probably depend on the general crypto market aspect and especially Bitcoin’s performance. Bitcoin had previously fell to $ 81,000, which has triggered the relevant decreases in many Altcoins, including XRP. This movement brought the XRP closer to losing a $ 2 lock psychological support level.
