Coinbase Ventures’ foray into Ethereum liquid staking network Rocket Pool fuels 15% rally for RPL

Coinbase Ventures announced a strategic investment into Rocket Pool, one of the leading liquid staking networks on the Ethereum (ETH) blockchain. The move is part of the exchange’s commitment to widening its horizons and solidifying its industry position.

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Coinbase new venture fuels rally in RPL

Coinbase Ventures, the corporate venture capital arm of the US cryptocurrency exchange, Coinbase, has acquired RPL tokens from the Rocket Pool team.

The firm’s venture into one of the leading liquidation networks is a show of confidence in the longevity of Rocket Pool as both parties reiterate the essence of decentralization. With this move, Coinbase will be an active participant in the Rocket Pool Oracle DAO, with clear intentions to leverage its corporate Ether holdings for node operation.

The move has inspired a wave of optimism for the Rocket Pool token, RPL, extrapolating its surge by 15%. The bullishness is indicated in the token’s trading volume, up a staggering 75% in the last 24 hours. The uptick has seen multiple short positions liquidated, with open interest rising to around 55,000.

The last time the Rocket Pool ecosystem saw this much in short and open liquidations was around mid-April, and was attributed to the success of Ethereum's Shanghai/Capella (Shapella) upgrade. The Rocket Pool token retested the $61.00 high of November 2021 at the time of Shapella, over 200% higher than its January 2023 peak (see chart below).

RPL open interest

At the time a short-squeeze ensued as the stop losses of short positions were triggered. When this occurred, the ensuing fresh buys added to the bullish momentum, with the resulting buying pressure sending RPL price higher.  

Open Interest, funding rate FAQs

How does Open Interest affect cryptocurrency prices?

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

How does Funding rate affect cryptocurrency prices?

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

Rocket Pool price forecast

Rocket Pool (RPL) price, despite the recent rally, may be due for a correction as it approaches the supply zone between the $30.40 and $32.60 range. A supply zone is an area where there is significant concentration of selling pressure, capable of influencing the direction of the price.

Unless Rocket Pool price breaches this zone and converts it to a bullish breaker, RPL could be rejected south toward the $25.08 support level, or lower, to record a new range low in the dire case.

RPL/USDT 1-day chart

Conversely, if bullish momentum sustains the ongoing uptrend, RPL price could activate a bullish breaker, clearing the path for more gains. Such a move playing out could see the altcoin tag the 50-day Exponential Moving Average (EMA) at $33.23, or in a highly bullish case, shatter the $34.03 roadblock to confront the 100-day EMA at $37.13.