XRP traders are positioning themselves for a potential recovery as the cryptocurrency hovers around the $1 mark, despite a surge in negative sentiment online.

Futures open interest has risen to $2.78 billion, with a significant majority of traders on Binance and OKX taking long positions, even as social sentiment reaches a three-month low.

By Shaurya Malwa 16 min ago 2 min read

Summary:

  • XRP is trading near $1 with increasing futures open interest and trading volume, as Binance and OKX traders show a strong preference for leveraged long positions.
  • Despite this, social media sentiment regarding XRP has turned notably negative, marking the worst sentiment in three months, even though futures positioning is similar to when XRP traded at significantly higher values.
  • Network activity is on the rise, with nearly 50,000 active addresses in a single day; however, analysts caution that a drop below $1 could lead to forced liquidations of over-leveraged long positions.

As XRP struggles around the $1 threshold, traders are betting on a rebound despite a notable increase in bearish discussions online. This week, futures open interest, reflecting the total value of outstanding derivatives contracts, rose to approximately $2.78 billion, a 2% increase over the previous day, while trading volumes surged by 55% to about $1.17 billion according to CoinGlass.

On Binance, the ratio of accounts holding long XRP positions compared to short positions was more than three to one. This trend was mirrored on OKX, where the ratio also stood at about 3.6 to one.

A long position indicates a trader's expectation that the price will rise. Leverage allows traders to increase their exposure beyond their cash holdings, but it also means they face the risk of being liquidated if the market moves against them.

In contrast to the bullish positioning, sentiment regarding XRP has soured significantly. According to on-chain analysis firm Santiment, discussions about XRP across platforms like X, Reddit, and Telegram have reached their most negative point in three months, following the token's failure to gain traction. XRP's current trading price of around $1 is a steep decline from its previous highs above $3 last year.

The extent of this positioning is also evident in the token quantities involved. Approximately 2.77 billion XRP is currently tied up in futures positions, an increase from about 2 billion earlier this summer, and approaching levels seen when the token was valued much higher.

Activity on the XRP ledger is also increasing, with nearly 50,000 addresses active in a 24-hour period—the highest in over two months, according to Santiment. An active address is defined as one that has either sent or received transactions during the specified time frame, indicating greater usage of the ledger, though it does not clarify whether these transactions were for buying, selling, or internal transfers.

Market-wide data from CoinGlass indicates a long-to-short ratio of approximately 0.93 over the past 24 hours, suggesting that overall positioning is nearly balanced, but there remains a strong long bias on Binance, OKX, and among their larger accounts.

Traders are closely watching the $1 mark; if XRP dips below this level, it could trigger liquidations of leveraged long positions, leading to potential market sell-offs.

As of Monday morning in Asia, XRP is trading around $1, while Bitcoin has surged to $64,000.