[Analysis] "XRP Open Interest Nears $5 Billion...Possibility of a Sharp Rally"

Open interest (OI) in XRP has reportedly approached $5 billion. Typically, an increase in open interest is viewed as a signal of rising speculative demand.

Ryan Lee, Chief Research Analyst at Bitget, told BloomingBit on the 29th (local time), "XRP open interest has surged and is nearing $5 billion," adding, "This is an indication that investors are taking large positions and speculative activity is intensifying in the derivatives market." He further stated, "The sharp increase in (open interest) suggests potential for strong momentum."

Lee emphasized the possibility of a sharp price increase. He said, "XRP's narrow trading range is often considered a precursor to a 'breakout' (resistance level breach)," and analyzed, "With continued spot buying pressure, the likelihood of an upward breakout is increasing." He went on to add, "In particular, if short position holders are caught off guard, it could lead to a 'short squeeze,' noting that similar technical set-ups have previously resulted in rapid rally events."

However, he also mentioned downward pressure. Lee commented, "The direction is not yet decided," and explained, "If there is no clear catalyst, excessively high open interest can intensify volatility on both the upside and downside." He continued, "If upward momentum appears, a short squeeze could occur, but conversely, if profit-taking or macro risk aversion enters the market, it could trigger liquidation pressure and a downtrend."