Ripple’s native cryptocurrency, XRP, is showing signs of a subtle rebound following a challenging period in the market. While the asset has faced some declines in key metrics, interest in derivatives markets is growing, suggesting that there may still be upside potential for XRP. But will it be enough to overcome the current market uncertainty?

Decline in Key On-Chain Metrics

In the past few days, Ripple has faced a significant dip in its on-chain metrics, which has raised concerns about its short-term price trajectory. The number of transactions conducted on Ripple’s network has dropped sharply, from around 1.4 million to just 657,000 transactions in the past 24 hours alone. This substantial decline signals waning network activity and could indicate a reduction in market participants’ interest.

Additionally, unique accounts interacting with XRP have also seen a steep decline, with a drop from 19,018 to just 8,039 accounts. These drops in activity are a key indicator that XRP could struggle to gain significant traction in the near future. If interest continues to fade, it may hinder the potential for a major rebound, limiting its chances for a near-term rally.

Bullish Sentiment in the Derivatives Market

While on-chain signals suggest some weakness, the derivatives market tells a different story. In fact, futures and options traders are showing a significantly more bullish outlook for XRP. Over the past few days, open interest in both markets has increased steadily. The futures market alone has seen a 2.15% rise, bringing open interest to $3.18 billion, while the options market has experienced a remarkable 108.93% growth, climbing to $242,000.

Moreover, the funding rate for XRP has remained positive at 0.0091%, indicating that long (buy) traders dominate the market. The Open Interest Weighted Funding Rate, which measures the sentiment of derivatives traders, is also showing signs of growing optimism. At the time of writing, the rate stood at 0.0078, suggesting that traders are leaning toward a bullish outlook.

This growing interest in XRP derivatives suggests that traders are betting on a potential price rally. If these positive sentiments continue, they could provide the momentum needed for XRP to break through key resistance levels and drive the price higher.

Resistance and Support Levels for XRP

Despite the optimism in the derivatives market, XRP still faces a major hurdle at the $2.1004 resistance level. If the bullish momentum fails to push the price above this level, there could be a pullback. In such a scenario, potential support levels to watch include $1.923, $1.850, and $1.759, where XRP could find stability before attempting another rebound.

On the upside, breaking through the $2.233 resistance could open the door for further gains, potentially sending XRP to new highs. A decisive break above this key level would be a strong signal that XRP is on the path to recovery.

Where is XRP Headed?

Ripple’s future price action is still uncertain, with mixed signals coming from the market. While on-chain metrics show signs of weakening, the growing strength in the derivatives market suggests that traders are positioning for a potential rally. If these positive signals hold, XRP may be able to overcome its current resistance levels and continue its upward momentum. However, a failure to break through key levels could lead to a period of consolidation or further declines.

For now, XRP’s next move will likely depend on whether the bullish sentiment in the derivatives market can overcome the weak on-chain data and push the price past resistance levels. With so much at stake, all eyes are on XRP as it navigates this delicate phase of market activity.