XRP price is testing a major resistance level at $0.529, a key level above which could pave the way for a bullish breakout. A rise in XRP open interest indicates increased market engagement, indicating that price volatility is likely to increase.
With Ripple XRP price hovering around $0.51, market watchers are keeping a close eye on whether the asset can break out of a key resistance level within the next week.
Looking at the Open Interest (OI) indicator alongside other technical indicators suggests an interesting combination of forces.
Ripple’s key resistance levels and breakout potential
A recent analysis of Ripple’s daily chart has revealed some important price ranges. The automatic Fibonacci extension tool has set up resistance at $0.529, a level that XRP has previously tested but failed to sustain above.
This level marks a 23.6% Fib retracement from XRP’s all-time high, making it an important area to watch.
If XRP can build enough momentum to break through this level, the next hurdle will be around $0.564, which coincides with the 50-day moving average (MA) and the previous support-turned-resistance level. It turns out.
A successful breakout here could pave the way for further gains and push XRP into a bullish phase.
Source: TradingView
However, downside risk remains if XRP fails to generate sufficient buying pressure. Support levels of note are the 38.2% and 50% Fib retracement levels, located at approximately $0.505 and $0.482, respectively. A decline below these zones could again indicate bearish sentiment and could signal further consolidation.
Increased open interest indicates increased market engagement
An analysis of Ripple’s open interest (OI) metric across all exchanges shows a steady increase. The slight increase suggests increasing involvement from both bulls and bears.
As of recent data, OI is approximately 510.7 million, a level that has historically seen significant price movement. A rise in OI generally indicates that more money is flowing into the market as traders enter new positions in anticipation of large price movements.
Source: CryptoQuant
Historically, when OI reaches high levels, the price of XRP tends to become more volatile. It often indicates an impending breakout or failure.
If OI continues to rise in the coming days, it could be a harbinger of more pronounced price movements. This increased market activity could facilitate a bullish breakout above resistance or a downward correction if selling pressure outweighs buying interest.
Do Ripple’s ATR and RSI indicators signal a change in trend?
From a volatility perspective, Ripple’s Average True Range (ATR) indicator shows relatively low volatility. This trend suggests that a potential squeeze often precedes a significant price change.
The daily ATR has remained stable, suggesting that the narrowing of the price band may soon turn into a more definitive trend.
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Moreover, the Relative Strength Index (RSI) remains just below the 50 level, indicating that the asset is neither in overbought nor oversold territory.
If the RSI starts to rise towards 60 and above, it would indicate increasing buying momentum and could strengthen the bullish breakout. Conversely, if the RSI dips below 40, it could indicate increasing selling pressure and could lead to a retest of lower support levels.
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