XRP reaches oversell levels, as net flow becomes negative, what is next?
As the cryptocurrency market recovers, the sell-off has ruined XRP digital assets for some time. Given that XRP prices have been low since January, it is no surprise that the first rise offers early sellers the opportunity to exit the market. Interestingly, when the sell-out pushes it further into oversold territory, this triggers bullish narratives from Altcoin, thus creating the possibility of a bounce point from here.
XRP Netfrows remains negative
Researchers shared an update on XRP outflow through data from DOM on X, indicating that they have remained negative for some time. In the post, Dom explained that despite the price increase of Altcoin, XRP is still on oversold territory for a 7-day period. The accompanying screenshot shows that over 88 million XRP tokens were sold, totaling $210.9 million.
Data from the Coinglass website confirms this because at the time of writing, the XRP net stream has remained negative for the past seven days. So far, May 9 has been the worst when it comes to selling out, with net traffic falling to -96.33 million in one day. The following days saw an average of -20 million US dollars in net traffic.
However, this is not what causes the alarm. If anything, Dom explained, this could be a bullish price in XRP. One of the reasons for this is that prices are rising and selling is dominant, which shows that retail is not behind it. He explained that whales and market makers may be absorbing coins dumped on the market, causing prices to rise simultaneously.
Dom explained that this is a “bulking imbalance from the microstructure lens of order flow” which means it may actually end up being beneficial to XRP prices. The continuation of this trend is expected to drive prices higher, especially when sellers run out of tokens for sale.
Open interest indicates investors are
According to Coinglass, while the network traffic is still negative, XRP open interest tells a different story. After the price rises during this period, it climbed in May. At the beginning of this month, the public interest was $3.72 billion, but it has since increased to $5.53 billion on May 14.
This increase in open interest shows that investors are actively placing their bets. As interest continues to rise, prices may respond to new liquidity inflows. This could set the price as fast road, reaching $3.
Featured pictures from dall.e, charts from tradingview.com
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