HomeNewsAgainst the Tide: XRP Whales Buck Trend, Favoring Long Leveraged Positions

Against the Tide: XRP Whales Buck Trend, Favoring Long Leveraged Positions

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  • OKX traders increase long positions in XRP, showing optimism despite recent declines and adversities in Ripple.
  • Despite unfavorable news and price decline, the strategy of experienced traders indicates expectations of XRP recovery.

This scenario for XRP shows a positive response and unusual optimism among investors and professional traders, despite recent adversities and unfavorable price performance of the token. 

Although XRP has seen a 20% drop in 2024, approaching its lowest daily close since October 2023, traders are increasing their leveraged long positions on the OKX platform. This behavior suggests that, even in the face of unfavorable conditions and volatility in the XRP price, these experienced traders see an opportunity or expect the XRP price to recover or hold steady at current levels.

XRP perpetual futures 8-hour funding rate. Source: Coinglass

The curious thing about this activity is that it offers a contrarian view to the general market perception. While the prevailing narrative may be one of caution or pessimism due to recent adverse news and price declines, the fact that prominent traders in OKX are opting for long positions indicates a level of optimism or a strategy based on the expectation of an improvement in XRP’s near future.

The stability in financing costs for XRP futures over the past month, even with the price decline, raises questions about the strategy of retail traders, suggesting that they may be expecting a drop in price or maintaining a cautious stance.

Negative events, including the SEC dispute and the recent cyber attack on Ripple co-founder Chris Larsen’s personal accounts, have weighed on investor confidence.

However, the implementation of a “claim” function by Ripple’s validators, which allows issuers in the XRP Ledger to retrieve tokens, could provide a tool for resolving legal disputes and obeying court orders, according to David Schwartz, Ripple’s CTO. This measure differs from the network’s existing “freeze” feature and could have significant implications for token management and investor confidence.

XRP-long-to-short ratio
Exchanges’ top traders XRP long-to-short ratio. Source: Coinglass

The perception that approval of an XRP exchange-traded fund (ETF) by the SEC is unlikely has also affected investor expectations. However, the positioning of professional traders using derivatives shows a different scenario: there is a prominent bullish bias, with the ratio of long versus short positions in OKX reaching 7.2x, which is close to the 30-day high.

Perpetual contract funding rate data, which has remained near zero since January 4, shows a balanced demand for leverage between long and short positions. This indicates that, although professional traders are leaning towards optimism, their positions are finding similarly sized counterparties in terms of leverage demand.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628