XRP Price Forecast as Spot Volume Falls 1.94B and Open Interest Hits 3-Week Low

Ripple (XRP) price is down by 0,74% today, October 12, as choppy moves dominate the broader crypto market. The drop coincides with a drastic drop in spot trading volumes in the last seven weeks and reduced demand for XRP futures positions.

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XRP Spot Trading Volumes Drop

Data from CryptoQuant shows that XRP’s spot trading volumes on the Binance exchange dropped from 597 million on August 26 to 168 million on October 11. This represents a 429 million decline in these volumes.

At the same time, volume across other exchanges also moved from 2 billion to 485.8 million, a 1.514 billion drop.

The total drop comes to 1.943 billion within eight weeks, suggesting that there is little demand from spot traders who are likely sitting on the sidelines waiting for XRP value to set better entry prices.

Analyst Amr Taha notes that the falling spot volumes have led to a drop in Binance’s spot-to-futures volume ratio from 31% on September 26 to 12.7% on October 11. He notes that a similar drop occurred in mid-August before XRP price recorded a sharp rebound.

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Open Interest Falls to a 3-Week Low

CoinGlass data shows that XRP’s open interest has dropped from 2.38 billion on October 8 to 2.19 billion on October 11. This shows that the OI has dropped by 190 million within four days despite bullish XRP developments.

The drop suggests that futures traders are minimizing risk, as they close their long and short positions. The drop in OI also follows a wave of liquidations after a drop in XRP price from $1.52 to $1.38 after a bug was detected on XRP Ledger.

However, data from SoSoValue shows a divergence in institutional interest, with XRP ETFs recording $11.31 million in inflows in the week ending October 9.

XRP Price Rejected at Resistance as Bearish Pattern Forms

XRP price has been rejected at the resistance of $1.42. Following this rejection, the price appears to be forming a rounded bottom pattern on the four-hour chart.

The rounded bottom is a reversal pattern that suggests that a trend is about to change to a bearish. However, a breakdown could occur if XRP price closes below the support at $1.34.

The RSI on the four-hour chart has a reading of 38 that suggests that the momentum is favoring bears.

The CMF line has also made a sharp move south and now has a negative reading, with this showing that the selling pressure is outweighing the buying pressure.

XRP price will confirm a trend reversal to the upside if it closes above the resistance at $1.42, with such a move set to spark another bullish leg to $1.50.