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Ripple’s XRP token racked up nearly $1 billion in open interest over the weekend, with its price hovering around $0.61 at press time, data from CoinGlass showed.
What characterizes XRP price action?
While the two largest cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), are down 1.5% and 2.3% over the past week, XRP is up 4.1% over the same period. There are several factors that could explain XRP’s counter-trend price movement.
For example, digital asset manager Grayscale Investments recently launched a closed-end XRP Trust in the US, enabling institutional investors to gain exposure to one of the ten largest cryptocurrencies by reported market cap.
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The value of Grayscale’s Trust has risen more than 11% in a week, indicating strong institutional demand for the seventh largest crypto asset.
The launch of the fund has also fueled speculation about the possible approval of an XRP exchange-traded fund (ETF) soon. If the SEC approves an ETF based on XRP, it will become only the third digital asset to have its own ETF.
Another major development in the Ripple ecosystem is the expected launch of its USD-pegged stablecoin, RLUSD. Currently, cryptocurrency analysts on X are closely monitoring the stablecoin in private beta testing on both the XRP and Ethereum networks.
According to a hadith to update480,000 RLUSD were minted in the RLUSD treasury, indicating the active development of the stablecoin before its integration into Ripple’s services, including cross-border payment products. Stablecoins can also be used in decentralized finance (DeFi) protocols via blockchains.
Implications of high open interest
Data CoinGlass reports that open interest in XRP rose to more than $1 billion over the weekend before falling to roughly $945 billion at press time. Spot trading volume over the past 24 hours reached just over $2 billion.
A rise in open interest usually indicates increased market activity, indicating that more contracts are being opened. This may indicate expectations that the price will move in either direction, depending on the prevailing market sentiment. Notably, XRP’s open interest was last recorded at around $1 billion in March 2024.
As for the price action, cryptocurrency analysts have divided opinions on XRP. Ripple Labs’ recent legal victory over the SEC has provided optimism for altcoin bulls, according to one analyst. Prediction If the token overcomes major resistance levels, it could rise to between $16 and $20.
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Meanwhile, another cryptocurrency analyst, Karl Rohnfelt, said: Highlight Multi-year bullish triangle pattern on the token chart. He noted that if XRP breaks the pattern and turns parabolic, it could rise more than 200% within weeks.
On the contrary, XRP Inability A decisive breakout of the $0.60 resistance level could lead to the token retesting the $0.55 support level. XRP is trading at $0.61 at press time, down 1.6% over the past 24 hours.
Featured image from Pixabay, charts from CoinGlass.com and Tradingview.com