Monero Experiences Sharp Price Drop After Strong Rally, Futures Open Interest Hits Highest Since December
Monero (XMR), the leading privacy-focused cryptocurrency by market cap, has undergone a notable price correction over the past three days, even as futures open interest surged to levels not seen since late last year.
On Wednesday, Monero’s price dipped to $325 on Kraken, down from a recent high of $420 reached on Monday, according to TradingView data. This pullback follows an impressive seven-week rally that saw the price climb from $165 to $420. The surge was largely attributed to positive developments around U.S. regulatory clarity and the upcoming FCMP++ upgrade, which promises to strengthen Monero’s quantum resistance by enhancing its forward secrecy.
Rising Futures Activity
The price drop coincides with a significant rise in futures market activity. Open interest—the total number of active futures contracts—jumped to 161,370 XMR, marking the highest level since December 20th, according to Coingecko. Over the last three days, open interest has increased by 20%.
Typically, a rising open interest alongside falling prices suggests bearish sentiment, indicating that traders may be betting on further declines through short positions.
Bullish Signals from Funding Rates
However, the story for Monero appears more nuanced. Perpetual futures funding rates remain positive, signaling that long positions still dominate the market. These funding rates, which are settled every eight hours, reflect the cost of maintaining leveraged futures trades, with positive rates indicating that bullish traders are paying premiums to hold their longs.
This combination of rising open interest and positive funding rates suggests traders might be embracing a “buy the dip” approach, increasing their long exposure in anticipation of a rebound in XMR’s price.
