XRP is fluctuating in the $3.00-$3.20 range, derivation data indicates severe fluctuation | XRP Price Prediction

After being rejected at the $3.50 resistance level, XRP has been oscillating within a narrow range of $3.00 to $3.20 for four consecutive days. However, data from the derivation market indicates that a larger price fluctuation may be imminent. As shorting sentiment heats up, funds continue to flow into the exchange, and open interest (OI) hits a new high, the XRP price may face a critical turning point for a breakout or a big dump.

XRP is consolidating in a key range

After a continuous rise, XRP encountered strong resistance around $3.50, and the current price continues to fluctuate between $3.00 and $3.20. On the surface, the trend appears stable, but on-chain data reveals hidden risks of significant fluctuations.

Open interest surges, indicating a brewing market trend

CryptoQuant data shows that the open interest of XRP in mainstream CEX reached a historic high of nearly $3.9 billion earlier this week, then fell back to the current $3.08 billion. This data reflects a large influx of new funds into the derivation market, indicating that market sentiment is highly active.

While the price is consolidating, the surge in open contracts often indicates that the market is building momentum, which may trigger a large market movement driven by forced liquidations, whether upwards or downwards.

Shorting positions dominate, market bearish sentiment rises

According to CoinGlass data, as of July 27, the Long/Short Ratio for XRP is 0.96, meaning that short positions account for 50.77%, while long positions are only 49.23%. This data indicates that market participants are leaning towards betting on a price fall.

Despite the strong bearish sentiment, this could also form a potential "short squeeze" foundation: once the price unexpectedly rises, excessive short positions will be forced to Close Position, resulting in a strong rally in the short term.

Net inflow to the exchange increases, indicating profit-taking pressure

Meanwhile, the net inflow of XRP to the exchange has been positive for two consecutive days, indicating that more tokens are flowing into the exchange, which usually represents that holders are ready to sell.

According to AMBCrypto, as of now, the net inflow of XRP is $1.28 million, slightly higher than the $1.21 million from the previous day. If market buying cannot offset this selling pressure, XRP will find it difficult to break through the current consolidation range.

Technical Direction: Bear Trap or Imminent Bullish Counterattack?

Based on the current market structure, XRP is still trapped in a consolidation range, but the rise in shorting demand is countered by bullish buying. If the price experiences a slight increase and attracts more shorting to enter, it will lay the groundwork for a short squeeze, pushing XRP to break through $3.20 and challenge $3.50 again.

But if the selling pressure continues to strengthen, the market may trigger long position Close Position, causing the price to fall back to the $2.90 area.

Conclusion: XRP is currently at a critical technical junction, and on-chain data indicates that the market may experience significant Fluctuation. For crypto investors, monitoring derivation data, capital flows, and changes in market sentiment will be key to assessing the next wave of market movements. It is advisable to remain vigilant and flexibly adjust position strategies to respond to potential short-term Fluctuation and trend reversals.