Analysis: The increase in XRP and DOGE contract holdings but dwindling price momentum may indicate that the market's preference for volatility and downside risk is growing

On May 14th, despite the sluggish spot price, speculative positions in the XRP and Dogecoin (DOGE) futures markets continue to accumulate, suggesting a growing market preference for volatility and downside risk. The data indicates the following: · DOGE Futures: The open interest in futures contracts witnessed a significant surge of 63.9% within a week, rising from 9.89 billion to 16.2 billion USD. During the same period, the spot price increased by 40% to $0.23. · XRP Futures: The open interest in contracts also showed a growth of 41.6% during the same period, with an increase of over 1 billion USD. However, the spot price increase was relatively moderate, rising from 2.14 to 2.6 USD. On-chain analytics company Glassnode stated that the divergence between price momentum decay and the spike in open interest implies that speculative positions are continuously accumulating, which requires caution. Open interest (OI) serves as a gauge of speculative activity. When it diverges from a stagnant price, it often indicates that leverage growth has outpaced actual confidence. This pattern has led to flash crashes on multiple occasions in the past.