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XRP Price Boom in Crosshairs as Traders Expect Short Squeeze Fueled Rally
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Shaurya Malwa
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By Shaurya Malwa|Edited by Parikshit Mishra
Jun 3, 2025, 5:35 a.m.
- XRP’s open interest has surged to nearly $5 billion, indicating increased speculative activity and potential for a price breakout.
- The token is trading around $2.20, with market watchers noting a tight consolidation range that often precedes breakouts.
- Elevated open interest could lead to heightened volatility, with potential for both short squeezes and large-scale liquidations.
XRP’s
ballooning open interest reflects a surge in speculative activity and hints at a potential price breakout in the near term, market watchers say, as the token trades around $2.20 as of Tuesday morning.
“XRP’s open interest has surged to nearly $5 billion (over the weekend), indicating increasing speculative activity as traders take sizable positions in the derivatives market,” Bitget chief market analyst Ryan Lee said in a message to CoinDesk.
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“This spike suggests strong potential momentum, with market participants bracing for a decisive move,” he added.
XRP’s price is currently trading in a tight consolidation range — often a technical precursor to breakouts — while consistent spot buying pressure adds to the bullish sentiment.
Historically, similar setups in XRP have resulted in rapid rallies, catching short sellers off guard and triggering short squeezes. Yet, while the elevated open interest signals anticipation, the direction of the next big move remains far from certain.
However, without a decisive catalyst, Lee warned, such high levels of open interest could also amplify volatility, with traders at risk of large-scale liquidations if sentiment turns sour.
“Without a clear catalyst, such elevated open interest could exacerbate volatility in either direction,” Lee explained. “A bullish surge may trigger a short squeeze, while an influx of profit-taking or macro-driven risk-off sentiment could fuel liquidations and downside pressure.”
Market watchers are closely monitoring developments around the XRP Ledger (XRPL), which could serve as a fundamental catalyst, as well as any ETF-related momentum that may emerge from institutional interest.
Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis.
Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM, BANANA, ROME, BURGER, SPIRIT, and ORCA.
He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.
