XRP Price Forecast: More Consolidation before $0.60 Retest?

Insights:

XRP price stalled at $0.51 on May 2, 2024, and despite wobbling with the market over the past month, derivatives traders are showing remarkable resilience.

XRP price is Outperforming the Market

Ripple (XRP) price suffered volatile swings in April, as it recorded a 24% decline for the month. But remarkably, a closer look at the recent market activity suggests that XRP has outperformed Bitcoin, Ethereum and the broader crypto market in the last 10 days.

Since April 23, XRP has declined 10.1% according to the the market data depicted above.

Meanwhile, the TOTAL CRYPTOCAP chart which tracks the market capitalization of all listed crypto assets, shows a decline of 13.3% during the same 10-day timeframe between April 23 and May 2.

This essentially indicates that XRP price has outperformed the overall crypto markets by a 3% margin in the recent week.

Speculative Traders’ Optimism Behind XRP Price Resilience

Looking beyond the price charts, recent trends observed in the derivatives markets suggest optimistic speculative traders are behind XRP’s resilient price performance relative to the broader crypto sector.

Coinglass’ Open Interest chart below tracks real-time swings in the value of active futures contracts opened for a specific cryptocurrency asset.

On April 23, XRP open interest stood at $562.3 million. At the time of publication on May 2, that figure has declined to $540.2 million, with $22 million deficit representing a 4% decline.

Meanwhile, XRP price dropped by 10.1% during the same 10-day period between April 23 and May 2.

When open interest holds steady with smaller declines compared to price, strategic investors may interpret it to be a bullish signal.

Firstly, it suggests that despite the drop in price, market participants are maintaining their positions, making hedge purchases rather than exit. This continued show of interest indicates underlying confidence among existing holders.

Secondly, the relatively stable open interest may indicate fatigue among sellers, which is often a precursor to a rebound phase.

XRP Price Forecast: Bulls to Hold $0.50 Support

Drawing inferences from the market data analyzed above, a stable open interest could keep XRP price above $0.50 in the days ahead. However, the prospect of a definitive rebound toward $0.60 still relies heavily on demand returning to the broader crypto markets.

On a positive note, the Bollinger bands technical indicator shows the Ripple-backed coin is currently trading just above the 20-day SMA at $0.51, giving bulls the upper hand in the near-term.

If the bulls move to extend the recovery phase further, they could face a major resistance at $0.55, as depicted by the upper-limit Bollinger band indicator.

On the contrary, the bears could seize control if it loses the $0.45 psychological support. However, that outcome seems unlikely in the near term with the open interest holding steady, and a potential buy-wall mounted at the $0.48 level.