XRP aims for $1.42 breakout amid rising long positions

Key points to note

• After defending support at $1.38, XRP is nearing the $1.40 mark.
• Futures open interest rose slightly to 2.24 billion XRP, pointing to a small rise in derivatives exposure.
• The open-interest-weighted funding rate remains positive at 0.01%, indicating that traders with long positions are paying a premium to hold them.
• A daily close above $1.42 could open the path toward $1.50 and $1.70.

On Tuesday, Ripple's XRP fell 1%, drawing closer to the psychologically important $1.40 level after buyers held the $1.38 support.

This uptick follows a failed attempt to break through selling resistance near $1.50 last week.

If XRP stays above $1.40, its short-term prospects would improve; a further rejection, however, could raise the likelihood of profit-taking and trader fatigue.

Derivatives indicators remain largely favorable, with futures open interest edging up and funding rates holding positive.

Nonetheless, technical gauges suggest that buying momentum has softened, making the $1.42 resistance a key point for XRP's next move.

XRP futures open interest sees slight increase

On Tuesday, XRP's derivatives market showed signs of stabilization. According to CoinGlass, Perpetual futures open interest inched up to 2.24 billion XRP, compared with 2.23 billion a day earlier and 2.2 billion on Sunday.

Open interest reflects the count of outstanding futures contracts. A sustained rise accompanied by increasing prices may indicate that traders are adding fresh capital to bullish bets.

Still, current exposure is lower than the 2.78 billion XRP seen on August 15, indicating that leverage has not fully recovered from its recent decline.

If retail participants keep raising their exposure, the extra demand might help XRP hold above $1.40. Conversely, a drop in open interest would suggest diminishing confidence and could leave XRP susceptible to another pullback.

The open-interest-weighted funding rate stayed in positive territory at approximately 0.01%.

According to CoinGlass, the rate has hovered around that level since August 28. A positive funding rate indicates that long position holders are compensating short traders, which typically reflects stronger demand for bullish bets.

This suggests traders remain willing to pay a premium to maintain long positions despite XRP's recent consolidation.

However, a positive funding rate does not ensure additional gains. If bullish positioning becomes overcrowded while XRP struggles to break resistance, a sharp drop could trigger long liquidations and accelerate selling pressure.

Overall risk appetite in the crypto market remains supportive. On Tuesday, the Crypto Fear and Greed Index registered 69, placing sentiment in the "Greed" category. That was slightly below Monday's level of 71.

High optimism may encourage traders to increase exposure to assets such as XRP. But a high reading can also signal that the market is vulnerable to profit-taking, particularly if prices fail to extend gains.

If the current sentiment persists, it would back bullish positioning; a sharp decline in the index could reduce demand for XRP and other major altcoins.

XRP needs to break $1.42 to aim for $1.50

XRP traded near $1.40 after rebounding from $1.38 support. The token remains above its major exponential moving averages, preserving its broader bullish structure.

Initial resistance sits near $1.42, where a descending trendline is limiting the recovery. A daily close above this barrier would confirm a short-term breakout and bring the recent high around $1.50 back into focus.

Clearing $1.50 could allow bulls to target the next major resistance level at $1.70.

The Relative Strength Index stands near 59, above its neutral midpoint of 50. This shows that buyers retain an advantage, although momentum is no longer as strong as during the earlier rally.

The Moving Average Convergence Divergence indicator has slipped into negative territory. The signal points to fading upside momentum but does not yet indicate a decisive bearish reversal.

If XRP fails to break $1.42, the 200-day EMA near $1.36 represents the first major support level.

A daily close below that level could increase selling pressure and expose the 50-day EMA around $1.26. The 100-day EMA provides deeper support near $1.24.

These moving averages create a broad demand zone that could attract buyers during a more significant correction. As long as XRP remains above the cluster, its wider bullish structure should remain intact.

The immediate outlook depends on whether buyers can convert $1.40 into support and achieve a daily close above $1.42. Success would favor a renewed advance toward $1.50 and potentially $1.70, while another rejection could send XRP back toward $1.38 and the 200-day EMA.