XRP Bulls Target Price Upside as Short Sellers Face Rising Pressure

XRP’s Open Interest Nears $5 Billion as Traders Brace for Potential Volatility Surge

XRP’s derivatives market is experiencing a notable uptick in activity, with open interest climbing toward $5 billion as the token trades near $2.20 early Tuesday. This surge reflects a wave of speculative positioning, suggesting traders are anticipating a significant market move.

Ryan Lee, Chief Market Analyst at Bitget, remarked:

“The spike in open interest indicates that traders are aggressively taking positions, which often signals increased volatility ahead. The market is clearly preparing for a breakout, though the direction is still uncertain.”

Currently, XRP is consolidating within a narrow price range, a technical pattern that often precedes strong directional moves. Alongside this, steady spot market demand adds a bullish undertone to the market sentiment.

Historically, such elevated open interest has paved the way for sharp rallies, especially when short sellers are forced to cover their positions in a short squeeze. However, Lee warns that this leverage can also amplify downside risk:

“Without a clear catalyst, the elevated open interest could lead to heightened swings either way. A positive trigger could ignite a squeeze, but negative sentiment or macro pressures might provoke liquidations and price declines.”

Market watchers are focusing on developments within the XRP Ledger ecosystem and any emerging institutional interest tied to crypto ETFs as potential catalysts for XRP’s next major move.

As XRP approaches this critical threshold, traders remain cautious, weighing the potential for explosive gains against the risks of rapid market shifts.