Although the XRP course had a strong period, the sentiment now seems to be completely turned around. For the last 24 hours, XRP fell by 3.82%, while traders on the futures market also lose confidence in the currency. The so -called open interest has fallen by 37% for XRP, and usually that is a bad sign for the course.
Bad sign for XRP
Since the peak of January 15, the Open Interest on the Futuresmarkt for XRP has fallen by 37%. The open interest is the total number of outstanding contracts on the Futuresmarkt, which have not yet been closed, settled or expired. In short, Open Interest provides insight into the activity and strength of trends on the Futuresmarkt.
You can usually translate those trends to the race. A falling open interest is generally a bad sign for a financial asset, although it can of course also point to a local soil when it comes to extreme falls.
For XRP this is the graph for the past months when it comes to the open interest. Although it fell firmly from the peak of January 16, it is at a pretty normal level for the financial asset.
In that respect it is still too early to really panic, although it had been better to see a reverse situation.
Rich investors remain bullish
To determine what sentiment is among professional traders, who are often a bit richer than private individuals, we can also look at the Futures Premium. That is the interest that traders are willing to pay to buy XRP futures, which are contracts that give them the right to buy XRP in the future at a pre-agreed price.
We call that interest the “premium” and it is currently slightly above 10% for XRP.
A premium above 10% is generally seen as bullish. If there is a premium of between 5-10%, it is seen as a neutral market.
As you can see, the Premium fell to 0%during the crash on 3 February, but he managed to restore it to the neutral zone fairly afterwards. And in the meantime it is more than 10% again and you could say that the professionals are getting carefully bullish again.
In that respect that is not a bad signal for XRP.
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Source: https://newsbit.nl/xrp-zwaar-onder-druk-markt-verliest-vertrouwen/
