Ripple’s coin XRP tipped over Binance’s coin BNB and captured the fourth position among the largest cryptocurrencies by market cap. XRP captures this new position after ending an 8-month-long downtrend, establishing a new uptrend.
XRP flipped over BNB and captured the 4th position among the cryptocurrencies with the largest market cap. With a market cap of $93 billion, the coin is just below Bitcoin, Ethereum, and Tether. Although XRP toppled over BNB, it does not have a healthy lead to keep up with the position that it captured lately. BNB’s market cap is just above $92 billion, which gives XRP not much leverage or grounds to hold onto.
Since the market caps of both these lie too close to each other, the market is doubting whether XRP will be able to hold onto the ground that it has captured. Looking at the open interest (OI) of XRP, it seems XRP might.
The OI is a parameter that shows the number of open contracts in the derivatives market. When OI increases, it shows that traders are opening new contracts and the direction of the market.
XRP funding rate turns positive
However, the OI fails to reveal whether the newly opened contracts are short or long. It only takes into account the number of contracts being opened; hence, it is important to take a look at the funding rate. The funding rate indicates whether shorts are paying longs or vice versa.
The OI-weighted funding rate has turned positive, and this means that longs are paying shorts. Despite the slight positive value, it is not a sudden change; rather, it is a gradual increase from the negative region. This shows that it’s not hype or any other temporal factor but legitimate interest from the market.
XRP breaks out from an 8-month-long downtrend
It’s not just the derivatives market that looks bullish, but even the technical side of XRP looks bullish. As shown in the chart above, XRP has broken out of a falling wedge pattern, where the prices kept crashing for nearly 8 months. The specialty about the breakout is that XRP has pushed past the 50-day moving average, a short-term indicator, which shows a short-term bullish signal. Given that this breakout turns out to be a bull rally, there is a high chance that XRP could cross $2.
