Ripple (XRP) price closed November 30 around the $0.60 mark sealing a 4% month-on-month growth performance.
In the derivatives markets, XRP Futures contracts attracted a $56 million (9%) increase in total capital inflows.
XRP open interest growth has exceeded spot price movement, suggesting growing confidence among bullish traders.
Investors Brought in $56 Million in Fresh Capital Inflows
XRP price performance in November was highly volatile. From the peak of $0.72 to a bottom of $0.56, XRP price recorded a Simple Average price of $0.63
Amid the volatile XRP price performance in the spot markets, investors in the derivatives markets are taking on a more positive. This further confirms that XRP traders are anticipating a bullish reversal.
According to Coinglass, Ripple (XRP) Open Interest jumped about 9% between November 1 and November 30. As depicted below, it increased from an opening balance of $616.60 million to hit $674.4 million by the end of the month.
Open Interest quantifies the total capital invested in active perpetual futures contracts for a specific crypto asset. Typically, an increase in Open Interest is a bullish signal. It indicates that more investors are bringing capital into the markets than those closing out their positions.
However, while there has been a 9% increase in open interest, the price has only risen by 4% in the past month. When Open Interest growth outpaces price increase, as observed above, it is often a strong indication that the current spot prices maybe undervalued.
This is also an indication that market participants are showing confidence in the current XRP price uptrend by entering more positions.
These two factors could drive XRP price into a December price rally.
XRP Price Prediction: Can the Rally Reach $1 ?
Having defended the $0.60 territory at the close of November 2023, the $56 million capital inflows recorded in the past month puts XRP price on an upward trajectory.
In the daily time frame, Bollinger Band technical indicator also suggests it will enter a leg-up toward $0.70 in December. However as seen below, at $0.60, XRP is currently trading below the middle band or simple moving average of $0.62.
This alignment suggests that XRP is still far from entering overheated territory. Traders often interpret this as a bullish signal, suggesting that XRP is in good stead for further upswing.
However, the bulls could face significant resistance at the upper Bollinger band of $0.65. A decisive breakout above that range could drive price to a new 2023 peak above $0.70.
XRP Price Prediction, December 2023 | Source: TradingView
On the downside, the bears could negate that XRP price prediction if they successfully force a downswing below $0.55. However, the support buy-wall around the lower Bollinger band at the $0.58 area will likely prove daunting.
Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.