Goal Reached: Company Successfully Achieves Desired Outcome
Ripple’s price surged above $0.66 on March 25, experiencing a 17% increase within the span of a week. Recent trends in the derivative market indicate that traders are eagerly anticipating further gains.
In line with the overall trend in the crypto market, Ripple (XRP) has been on an upward trajectory over the past week.
The open interest for XRP crossed the $1 billion mark for the first time in two weeks. On March 11, the price of XRP saw a surprising breakout, surging by 18.5% in just 24 hours to reach a peak of $0.74 in 2024. However, profit-taking quickly followed, leading to a correction that brought the price below $0.60 within a week.
After a period of consolidation, recent developments in the derivatives market suggest that bullish XRP traders are preparing for another significant price increase.
CoinGlass’s open interest chart provides real-time data on the total value of active futures contracts for a specific cryptocurrency. This serves as a measure of the market depth, liquidity, and overall investor interest in the underlying asset.
On March 26, XRP’s open interest reached $1.02 billion, the highest since March 14. This also indicates a net capital inflow of $150 million since the significant market dip recorded on March 20.
An increase in open interest during a price recovery phase suggests that most traders are betting on the continuation of the current price uptrend, leading to rapid capital inflows.
Between March 20 and March 26, XRP spot prices increased by 19.4%, while open interest only saw a 15% jump. This unique market alignment suggests that the current rally is driven more by organic spot demand than speculative trading in the futures market.
Bullish traders have increased their leverage by 100% to take advantage of the rally. This indicates that there are stronger fundamental factors behind the ongoing rally, such as increased adoption and positive developments in the Ripple-backed blockchain network, including the introduction of automated market maker (AMM) functionality.
The funding rate for XRP has also increased, from 0.01% to 0.02% between March 23 and March 26. This shows that bullish traders have more than doubled their leveraged positions in the past 72 hours.
An increase in the funding rate typically signals a willingness to take on more risk in anticipation of further gains. Long traders pay higher fees to short traders to keep their perpetual future positions open, expecting larger profits as spot prices rise.
When short traders observe a rapid increase in leverage and risk-taking among long traders, they often make spot purchases to hedge their bets and mitigate potential losses if the rally breaches their margin-call price. These hedging purchases from short traders could contribute to the growing market demand and further accelerate the price rally in the coming days.
Taking into account the 100% increase in leverage activity among bullish traders, the organic growth in spot demand, and the potential hedging strategies from short traders, it appears that XRP price is poised for another rise above $0.75.
The relative strength index (RSI) technical indicator, with a current trend of 53.2, also supports this bullish XRP price forecast. After a 17% increase in price over the past week, there is still significant room for growth before XRP markets reach overbought levels.
Therefore, if XRP can break above the next major resistance at $0.70, as indicated by the upper Bollinger band, a significant breakout towards $0.75 could be in the cards.
However, in a bearish market downturn, the support level at $0.57, depicted by the lower limit of the Bollinger band indicators, will be crucial. A major drop below this range could mean that bears regain control of the market momentum.
