XRP Derivatives Show 7.34% Volume Surge, Bullish Signals Ahead of Fed Decision

Ripple (XRP) has shown three bullish signals ahead of the U.S. Federal Reserve’s rate decision, with key derivatives trading indicators suggesting a potential upward price movement. On Thursday, March 19, XRP opened trading at $2.25, and despite recent market shifts, derivatives data indicates growing optimism among traders.

Ask Aime: Could the Federal Reserve's rate decision push Ripple's XRP higher?

One of the key signals is the increase in XRP derivatives trading volume, which rose by 7.34% to $5.05 billion, while open interest (OI) edged up by 1.85% to $3.19 billion. This surge in market participation suggests that traders are actively opening new positions in anticipation of heightened volatility, which typically reflects confidence in an impending price move.

Ask Aime: What does the increase in XRP derivatives trading volume and open interest suggest about the upcoming price movement?

Another bullish indicator is the long/short ratio on leading exchanges. On Binance, the long/short ratio for XRP/USDT accounts stands at 2.394, meaning there are nearly 2.4 long positions for every short. Similarly, OKX’s long/short ratio is 2.01, reinforcing the bullish outlook. This disproportionate favor towards long positions often suggests an expectation of upward price movement.

Additionally, sell-side liquidations for XRP have notably decreased, indicating that bearish pressure is easing. In contrast, buy-side liquidations have risen, suggesting that leveraged traders are positioning for an upward price move. This shift reduces the risk of downside volatility and supports the case for a potential recovery rally.

Despite short-term price consolidation below the $2.30 level, XRP derivatives traders appear to be positioning for a bullish breakout towards $2.50. With rising open interest, a positive long/short ratio, and reduced sell-side liquidations, XRP may be primed for an upward move, contingent on the broader market reaction to the Fed’s rate decision on Wednesday.

Technical indicators also show mixed signals ahead of a potential breakout. The Bollinger Bands (BB) midpoint at $2.33 remains a key resistance level, while the lower BB at $1.95 provides strong support. A decisive break above $2.33 could trigger momentum toward $2.50, where a breakout may fuel an extended rally. The MACD indicator is flashing early signs of a bullish crossover, with the MACD line moving upward toward the signal line, suggesting waning bearish momentum. Additionally, the histogram bars are transitioning from red to green, reinforcing the potential for a bullish reversal.

However, the recent 7.88% retracement over the last four sessions raises caution. A failure to reclaim $2.33 could see further declines, with $2.00 as the next major support. If XRP can sustain momentum and break $2.50, it could target $2.70-$2.90 in the coming weeks. Conversely, rejection at resistance could trigger further downside consolidation.

Investors have been rotating capital into emerging altcoins like Polkadot (DOT) and sui, driven by fresh ETF narratives. This rotation has left Ripple price trading below the $2.30 mark, with its trading volume declining alongside other major altcoins such as LTC, SOL, and ADA, all of which have seen increased selling pressure over the past 24 hours.

Despite the bearish sentiment in the spot market, derivatives trading data reveals a more optimistic outlook, with traders positioning themselves for potential upside ahead of the U.S. Federal Reserve’s rate decision. The anticipation that the U.S. Securities and Exchange Commission (SEC) was considering classifying XRP as a commodity as part of its settlement talks with Ripple has fueled a strong rally, as this move could eliminate a significant regulatory hurdle for altcoin ETF approvals.

In summary, while XRP’s price has struggled to maintain momentum this week, the derivatives market signals a bullish outlook. With rising open interest, a positive long/short ratio, and reduced sell-side liquidations, XRP may be poised for an upward move, contingent on the broader market reaction to the Fed’s rate decision. Technical indicators also suggest a potential breakout, but caution is advised given the recent retracement and the need to reclaim key resistance levels.