Editor's PiCK
XRP, Open Interest Nears $5 Billion... "Short Squeeze Potential Increasing"
Summary
- XRP's open interest is approaching $5 billion, indicating an increase in speculative activity in the derivatives market.
- CoinDesk mentioned that the combination of a rise in XRP's price and large-scale open interest raises the possibility of a short squeeze.
- Conversely, in the absence of a clear catalyst, there is a possibility that mass liquidation of long positions could increase downward pressure.
There is an analysis suggesting that strong volatility may occur in XRP.
According to CoinDesk, a media outlet specializing in virtual assets (cryptocurrency), Ryan Lee, Chief Market Analyst at Bitget, said, "Over the weekend, XRP open interest surged to nearly $5 billion," adding, "This means that traders are engaging in significant speculative activities in the derivatives market."
He continued, "Such a rapid surge in open interest indicates strong potential momentum, with market participants preparing for decisive moves."
CoinDesk assessed that, with XRP's price on the rise, the presence of large open interest could lead to a short squeeze (a situation where a large number of short positions are liquidated).
On the other hand, in the absence of a clear catalyst, high levels of open interest might instead result in mass liquidation of long positions. Analyst Ryan Lee explained, "If there is no clear catalyst, open interest can be liquidated in either direction," adding, "If long positions are liquidated, downward pressure could intensify."
Meanwhile, as of 3:03 p.m. on this day, XRP is trading at $2.20, up 1.61% from the previous day, according to CoinMarketCap.
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.
