Bitcoin and XRP Open Interest Surges as Bull Market Pullback Offers Buying Opportunities

Bitcoin Market Analysis: Understanding the Pullback

The current market rally for Bitcoin (BTC) has experienced a significant stall, with prices pulling back over 5% to $116,800 from recent all-time highs. This movement is characteristic of a typical bull market pullback, where profit-taking by long-term holders weighs on the cryptocurrency’s price. It is common for markets to revisit breakout points, and in this case, Bitcoin is testing the underlying buying interest at the May 22 high of around $111,960.

Historically, similar dynamics have played out in the market, such as the price drop earlier this year when BTC fell from over $100,000 to $75,000, subsequently revisiting the breakout point from late 2024. From a technical analysis perspective, the broader bullish bias remains intact as long as prices stay within the ascending channel on the daily chart.

Over the next 24 hours, traders should pay close attention to the hourly chart, which reveals a steep corrective trend lower. Currently, prices are trading below the Ichimoku cloud, indicating bearish momentum. However, the Relative Strength Index (RSI) on the hourly chart has dipped below 30, suggesting an oversold condition, contrasting sharply with the overbought reading above 70 seen just a day earlier. This discrepancy signals that a bounce back cannot be ruled out.

Should the price recover and end the downward-trending channel, the probability of a pullback to $111,960 could weaken, potentially paving the way for fresh record highs.

Surging Open Interest Indicates Bullish Sentiment

Volatility is expected to remain high as cumulative open interest in onshore and offshore futures and offshore perpetual futures has risen to 734.82K BTC, approaching the record of 744K BTC set in October 2022, according to data from CoinGecko. This growth in open interest is likely driven by offshore exchanges, as the number of active contracts on the CME remains below the May highs, with the three-month annualized basis still below 10%. In contrast, annualized funding rates on offshore perpetuals have surged to over 11%, indicating a growing demand for bullish exposure.

XRP Analysis: Key Support Levels to Watch

In parallel, XRP (XRP) is also experiencing a pullback, having dropped from $3 and currently trapped in a downward-trending channel on the hourly chart. However, XRP seems to be in a relatively better position, maintaining support at the confluence of the 100-hour simple moving average (SMA) and the Ichimoku cloud at $2.81. A breakout from this level would suggest an end to the current correction and a resumption of the broader uptrend toward the yearly peak of $3.4.

As XRP approaches this critical resistance level, bulls will likely face challenges again at around $3. Traders should be cautious of a move below the Ichimoku cloud, as this would strengthen the immediate bearish case, shifting focus to the 200-hour SMA at $2.6. With perpetual futures open interest reaching a record high of 2.74 billion XRP, according to Coinglass, annualized XRP funding rates hovering at 15% indicate a growing bias for leveraged bullish plays.

Ethereum: Waiting for a Breakout

Meanwhile, Ether (ETH) remains caught within an expanding triangle formation. The daily stochastic indicator is flashing an overbought reading, suggesting that the upward momentum is stretched, which weakens the case for a firm breakout in the short term. Consolidation around resistance appears likely, with prices remaining firmly above the Ichimoku cloud on the daily chart and short-term SMAs trending upwards.

Eventually, a breakout could shift focus toward the $3,400 target, which has gained attention from options traders. However, the overbought stochastic indicates that a convincing push above the upper trendline is unlikely in the immediate future.

Solana: Resistance Levels to Watch

Solana (SOL) is also encountering difficulties, as the upside remains elusive despite showing a dual breakout on the daily chart. Since Friday, bulls have struggled to overcome bearish pressures around the resistance level of $168, evidenced by the long upper wicks on the candles for Monday and Friday. Traders should look for a break above $168 to confirm bullish momentum; otherwise, a loss of the $157 neckline support could lead to a deeper decline toward $146, as indicated by the measured move method.

Conclusion: Market Outlook and Key Levels

As the cryptocurrency market experiences these fluctuations, traders should keep an eye on key support and resistance levels for Bitcoin, XRP, ETH, and SOL. For Bitcoin, resistance levels are at $118,000-$118,500, with support at $113,688 and $111,965. XRP’s resistance is at $3 and $3.4, with support at $2.81 and $2.6-$2.65. For Ethereum, resistance is at $3,067 and support at $2,905. Finally, Solana’s resistance stands at $168, with support at $157 and $145. Keeping abreast of these levels could provide significant insights for traders navigating the current market conditions.