- XRP’s volume-to-open interest ratio showed that the token maintained an increase in liquidity.
- Short positions overrode longs, and technical indicators suggested a downside.
Lately, the border market has had to deal with a widespread retracement in prices. But despite the decreases registered, traders’ interest in Ripple [XRP] remained remarkably strong, digital asset data provider Kaiko revealed.
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According to Kaiko, XRP’s volume-to-open interest ratio across all exchanges remained above a median value.
📈👀#XRP perpetual futures volume-to-open interest ratio remains above average on most exchanges, signalling sustained speculative interest. pic.twitter.com/SYDOUvD2EV
— Kaiko (@KaikoData) July 27, 2023
Rising activity and increasing liquidity
As two key technical metrics that measure liquidity and activity of options and futures contracts, the hike in the volume-to-open ratio means that live contracts and the money flow for XRP long and short positions have sustained a level of above-average interest.
XRP’s enduring appeal, even in the face of market volatility, could be proof of its relevance since it continued drawing attention from traders and investors alike.
However, one cannot deny that the previous surge in prices and partial court win has been responsible for keeping traders’ interests elevated. But what exactly is the sentiment of these traders toward Ripple’s native digital asset?
Well, XRP’s loss of 10% of its value in the last seven days seemed to be immaterial to some traders. According to Santiment, XRP’s funding rate was 0.01%. A positive reading of the funding rate meant that the average sentiment was bullish.
Therefore, long traders have to pay a funding fee to those on the short side. If the funding rate was negative, then the opposite would have happened.
Source: Santiment
The next stop could be depressing
Furthermore, Coinglass revealed that the long/short ratio was down to 0.95. The long/short ratio measures the relative strength of bullish or bearish sentiment in the market.
Contrary to the display of the funding rate, the decline in the long/short ratio meant that a large percentage of participants were shorting the market. Conversely, if the long/short ratio was above 1, then the bullish sentiment indicated by the funding rate would have been put into action.
Source: Coinglass
As per the price action, the four-hour XRP/USD showed that the token could decrease further in the short term. This was indicated by the Exponential Moving Average (EMA).
At press time, the 50 EMA (yellow) crossed over the 20 EMA (blue). When this happens, it means that the trend is bearish. So, traders’ preferred option to gain could be to short/sell the token.
Read Ripple’s [XRP] Price Prediction 2023-2024
Besides the EMA indications, the Cumulative Volume Delta (CVD) was down to -1.88 billion. This indicator compares buying and selling volume at specific price points.
If the CVD is positive, it means that there were more market buy orders than sell orders. But since XRP’s CVD was negative, it suggested that there were more aggressive sellers than buyers.
Source: Coinglass
