Ripple price prediction: XRP open interest decreases by 2.4 billion USD, a series of liquidations may lead to a big dump.

Since Ripple (XRP) reached a peak of $3.66 on July 18, the price has fallen by 15%, while the open interest in futures contracts (a measure of the total value of open leveraged positions) has also decreased by $2.4 billion. This decline has raised concerns that market fluctuations could trigger a series of liquidations, pushing the price below the support level of $2.60.

(Source: Coinglass)

Leverage was the main driving factor for XRP's increase of 68.7% from July 1 to 18, when the price rose from $2.17 to $3.66.

On July 18, the futures open interest hit a new high of $11.2 billion, then fell back to the current $8.8 billion, a decrease of 21%. In terms of contract trading volume, the current $2.82 billion has decreased by 12% from its peak. Although the market liquidation amount over the two weeks ending July 25 was about $325 million, the total open interest of XRP is still 48% higher than a month ago, indicating that the leverage ratio remains high and should be approached with caution.

The XRP derivative market remains stable

To determine whether whales and market makers are concerned about the $3 support level, one can look at the monthly futures price spread. In a calm market, the annualized level of futures trading prices is typically 5% to 10% higher than the spot market.

Over the past week, XRP monthly futures maintained a premium of 6% to 8%, indicating that market sentiment has not been negatively affected by the price retesting the $3 level. Even when XRP broke through $3.60, there was no significant increase in leveraged buying, which limited the risk of large-scale liquidations during market pullbacks.

(Source: Laevitas)

The expectation that the United States may launch a spot ETF has also strengthened people's confidence in XRP, especially after the assets under management for Ethereum ETF products exceeded $18 billion. Such events could benefit many other altcoins such as Litecoin (LTC), Solana (SOL), and Cardano (ADA).

However, in addition to positive news, the market has also been affected by false rumors, such as multiple banks integrating the XRP ledger and Ripple collaborating with SWIFT. These unverified messages have spread widely on social networks, despite the lack of clear evidence.

In fact, DeFi applications on the XRP Ledger have not been widely adopted. According to data from RWAXYZ, the value of tokenized assets on the network is only $134 million, lower than Avalanche's $190 million, and it hasn't even made it into the top ten blockchains. In terms of the activity of the decentralized exchange (DEX), the XRP Ledger also did not make it into the top 50, while Sui had a trading volume of $13.3 billion in the past 30 days, and Sei had $1.43 billion.

(Source: RWAXYZ)

Although the derivatives market indicators currently reflect market stability, in order for the XRP price to maintain a sustained momentum above 3 dollars, the market needs more clear evidence to demonstrate genuine interest and demand for the XRP ledger ecosystem.