The recent crypto market downturn has impacted XRP, with XRP open interest falling alongside other altcoins as investor sentiment cools. Bitcoin (BTC) attempted a minor recovery during Asian trading hours, briefly surpassing the $110,000 mark from early session lows of $108,760. However, indicators suggest that the bounce lacks strength and staying power.
Technical metrics are signaling caution. Timothy Misir, Head of Research at BRN, noted weakness in price momentum, with the Relative Strength Index (RSI) nearing oversold territory and the Moving Average Convergence Divergence (MACD) showing bearish signs. The Spot Cumulative Volume Delta (CVD) at a negative $199 million points to overwhelming sell-side pressure.
On-chain data further confirms softening network activity, with Daily Active Addresses dropping to 692,000 – a level below the historical low band. This decline suggests that overall participation in the Bitcoin network, and broadly across major cryptos like XRP, is tapering off.
Market Sentiment and Derivatives Outlook
The broader market is experiencing a pullback, as reflected by the CoinDesk 20 and CoinDesk 80 indices, which are down 2% and 1.7% respectively in the last 24 hours. One key signal of bearish sentiment: massive liquidations in the crypto futures markets. Over $940 million in leveraged positions were wiped out, including $800 million in long bets.
Ethereum (ETH) suffered the brunt with $320 million in liquidations. Meanwhile, open interest (OI) in Bitcoin derivatives remains elevated, barely below all-time highs at 740,000 BTC. In contrast, Ether’s OI has dipped from 14.6 million ETH to 14 million ETH, with similar contractions seen across other altcoins, including SOL, DOGE, ADA, LINK, and XRP.
The fall in altcoin open interest, XRP included, highlights net capital outflows as cautious sentiment prevails. Interestingly, despite the downturn, funding rates for most major tokens – except SHIB, ADA, and SOL – are still positive, indicating that many traders remain biased towards long positions.
Institutional interest in regulated BTC futures appears to be ebbing with OI in CME-listed contracts falling to 137,300 BTC from 145,200 BTC, erasing the gains made earlier this month. In contrast, BTC options markets show increasing activity, reaching their highest since late May. ETH options OI on the CME platform has risen as well, nearing levels not seen since September last year.
Over on Deribit, an upcoming options expiry is leaning bearish, with a noticeable bias toward Bitcoin puts—suggesting investors are bracing for further downside. Ether’s expiry data shows a more neutral stance. OTC activity at Paradigm reflects a mixed picture, featuring both downside protection on BTC and strategic plays on ETH.
XRP and Other Tokens Lose Momentum
As open interest shifts across the crypto spectrum, XRP’s drop in OI reflects the broader pullback in investor positioning. While XRP’s fundamentals remain intact, the derivative data suggests speculative capital is retreating for now, likely waiting for clearer market direction.
XRP open interest dropped as broader crypto derivatives faced liquidation pressure.
NFT Market Mirrors Risk-Off Mood
Non-fungible tokens (NFTs) have also borne the brunt of ETH’s price slide. Major blue-chip collections like Pudgy Penguins and Bored Ape Yacht Club lost significant value—down by 17% and 14.7% respectively. Even historically stable projects like CryptoPunks fell slightly, although with less volatility at just a 1.35% drop.
Trading remained active, with Pudgy Penguins leading volumes at 2,112 ETH (about $9.36 million), followed closely by Moonbirds and CryptoPunks. Still, NFT market capitalization shrank nearly 5%, falling to $7.7 billion from a peak of $9.3 billion seen on August 13. This rapid decline underscores how NFT assets often serve as leveraged ETH exposure, fluctuating in lockstep with the token’s swings.
Analysts point out that legacy projects like CryptoPunks act as a safer harbor during volatility, maintaining liquidity and lower beta characteristics. For institutional investors, this resilience reinforces their place as preferred long-term holdings.
