Today, the crypto market witnessed a mild sell-off with Bitcoin falling below the crucial $26,500 mark, sending the market into a slump. This downturn was influenced by a shift in funds and growing investor interest in emerging altcoins like ChainLink. Yet, XRP did not benefit from this capital inflow and fell below $0.5. Despite this, several on-chain indicators point to increased bullish momentum, pointing to a potential ‘buy the dip’ opportunity for the altcoin.
XRP traders are betting against price decline
Amid today’s sell-off, XRP saw significant liquidation, struggling to find buying interest above the $0.5 level. This led to many investors closing their long positions, weakening XRP’s resistance level. Data from Coinglass indicates that long positions worth more than $2 million were liquidated when the price of XRP fell below $0.5.
Still, sentiment changed when XRP hit a low of $0.49, indicating a surge in buying interest around this dip. The current long/short ratio stands at 1.16, tilting in favor of bulls who opened positions during the $0.49 dip. The data indicates bullish sentiment among traders, with long positions making up 53.9% and short positions making up 46.1%.
One of the most telling metrics, the Open Interest (OI) – which represents the total number of active futures contracts – has witnessed a remarkable increase, rising by $17 million. This increase in OI is a clear sign of increased trading activity, especially as the price is trading around $0.49. Such a trend suggests that at this price level, traders are turning actively bullish and building a robust support level.
The growing activity around this dip could raise the possibility that XRP will initiate a recovery rally in the coming days. If this momentum continues, we could see a comeback in the price of XRP.
What’s Next for the XRP Price?
The price of XRP fell below EMA levels in recent hours, weakening hopes for a bullish comeback. However, bulls are strongly defending a decline below the $0.49 dip as new buyers have joined the market. Currently, buyers are aiming to push the price above the EMA20 to strengthen long positions. At the time of writing, the XRP price is trading at $0.497, down more than 2.6% from yesterday’s price.
The price is currently testing USD 0.486, a crucial support level to keep an eye on. If the price recovers from this point, it signals a shift in market sentiment from selling at highs to buying at lows. This could lead the bulls to push the price past the resistance zone between $0.525 and $0.56.
However, if the support at $0.486 is broken, the altcoin could fall towards the next support at $0.459. It is vital for the bulls to hold this line as any decline below it would negate the bullish outlook and send the XRP price plummeting towards $0.42. Since the RSI level has reversed its trend from the oversold territory and is currently trading around 36, it maintains bulls’ confidence.