XRP’s derivative markets are back on track after a streak of long liquidation wiped the slate clean. This wipeout reset the stage, and the futures market is lopsided with inflows. With the inflows much higher than the outflows, the future for XRP looks very promising.
XRP’s two consecutive days of liquidations on January 30 and 31 fertilized the ground for the derivative markets to prosper. On Jan 30 and Jan 31, around $70 million and $57 million in long positions were liquidated. After this consecutive wipeout of more than $120 million long positions in two days, the market is well poised for a big move.
XRP futures market is lopsided
The ratio of the futures buy orders against the sell orders shows a massive variation and the market is lopsided. A crypto netizen shared a screenshot of the buys vs the sell orders, and the direction of the XRP price movement is quite visible. The price range from $1.613 and $1.615 is a tight zone with many orders.
A higher concentration of long (buy) orders can push the price up, especially if many of these orders get executed at the same time. Then the companies offering the contract should buy the underlying asset to support the prices and this will increase the demand and skyrocket XRP prices.
XRP may test $1.8 if buy orders are executed
Conversely, if the longs start to liquidate (margin calls), it can also accelerate a drop, but the initial signal is bullish. And, let’s not forget about smart money. When they see the market lopsided smart money will play contrarian, by selling and crashing the prices, creating a long liquidation cascade.
On the chart shown above, XRP has continued its downward trend since late July. The coin has been making lower lows and lower highs, despite multiple attempts to recover. However, with the futures market aligning more towards the bullish side, XRP may be set for a comeback. Even the Relative Strength Index indicator has tilted upwards, showing that the coin is set for a rally. When XRP starts moving upwards, the first resistance it will face will be at $1.8.
