XRP Reaches Critical Inflection Point: $2.30 Breakout Critical After 65% Open Interest Crash
XRP is trading at a key juncture, with the cryptocurrency maintaining around $2.20 after successfully defending its psychological $2 support
Quick overview
- XRP is currently trading around $2.20 after defending its $2 support level, with analysts suggesting a critical moment for the altcoin.
- The key resistance zone lies between $2.28 and $2.30, which will determine if XRP can break its ongoing downtrend.
- A significant drop in open interest for XRP futures indicates potential for a rapid price movement if buying pressure increases.
- Short-term indicators present a mixed outlook, with a potential bullish reversal setup if XRP can reclaim the $2.22 level.
XRP XRP/USD is trading at a key juncture, with the cryptocurrency maintaining around $2.20 after successfully defending its psychological $2 support level earlier this week. The asset rallied roughly 6% on Tuesday following a brief liquidity sweep on Monday, setting up what numerous analysts are calling a “now or never” moment for the ailing altcoin.
Critical Resistance Zone Defines Next Major Move
The $2.28 to $2.30 price range is now the most important level of resistance. It will decide if XRP will break its downtrend that has been going on for months since July. Technical analysts say that if the price closes above $2.30 every day, it would be the first proven trend change in months. This could make it easier to get to the $2.58 liquidity cluster.
XRP is bouncing off of a fair value gap slightly below $2, which was made during the November 21 bounce from $1.80. This retest shows that purchasers are still buying at lower prices, even though the market is going down. The asset, on the other hand, keeps making lower highs, which makes a coiled shape below the important $2.30 decision point.
There is a good value gap on the sell side between $2.34 and $2.42, where early profit-taking is likely to happen. But XRP’s price in 2025 has been marked by strong movements between areas of very high liquidity. This suggests that when momentum changes, the asset tends to go too far past intermediate resistance levels as it looks for liquidity.
Open Interest Collapse Sets Stage for Explosive Rally
The most convincing bullish case might be the big change in XRP futures posture. Open interest has dropped by more than 65% from its July high of $10.94 billion to just $3.75 billion now. Historical data shows that previous resets have happened before big price rises. The last big reset, which happened earlier this year, sent XRP to its highest level in seven years.
The drop in open interest shows that fewer people are trading in the market and there are fewer active futures contracts. This, oddly enough, makes it easier for the market to quickly move in one way when fresh money comes in. With thinner positioning in place, any rise in purchasing pressure could happen more quickly since there are fewer positions that are too heavily leveraged.
According to analysts, XRP spent five months consolidating after the January open interest fall before starting its July rise. The current reset is only two months old, but the pattern shows that there is a lot of upside potential after accumulation is over. Targets over $3 are looking more and more likely.
XRP/USD Technical Indicators Paint Mixed Near-Term Picture
Short-term momentum indicators show a complicated picture. The relative strength indicator shows a little bullish divergence, and getting back above the 200-period simple moving average would be a significant sign that the trend has changed. Funding rates, on the other hand, are mostly negative, which means that short positions are in charge of the futures market. This makes people feel more gloomy in the short term.
Over the past six weeks, crypto analyst Dom has found a three-drive exhaustion pattern that implies the trend is getting tired. When you flip the chart, you can see a definite reversal setup. For the first time in the downtrend, there is now a higher low. The important pivot is the monthly rolling volume-weighted average price at $2.22. If this level is reclaimed, it would mean that bullish rotation is happening and the price might rise to $2.50.
XRP Price Prediction: The Bull and Bear Case for Year-End
Bulls say that clear order books and washed-out positioning are signs that the time is right for a trend to change. The three-drive pattern, the flat corrective structure built on top of the highs from 2021, and the highly negative funding that generally comes before liquidity raids all point to a quick reversal into $2.50 and beyond.
Bears say that if XRP doesn’t break over $2.30, it could challenge the $2.00 to $1.90 support level again. If financing rates go below negative 0.01%, the chances of trying lower levels go up a lot. Most importantly, if present support and acceptance don’t stay below $2.00, the reversal setup will be completely invalidated, which may lead to what one analyst called a “ugly” end to the year.
The next big move seems to be coming soon as XRP gets closer to its $2.00 support and $2.30 resistance levels. The next few days will show whether XRP can finally break out of its months-long downturn or if it will have to go down even more before the end of the year.
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