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Ripple’s price soared above $0.66 on March 25, experiencing a 17% increase within the week. Recent trends in the derivative market indicate that traders are eagerly anticipating further upside.

Over the past week, Ripple (XRP) has been following the upward trajectory of the overall mega-cap crypto market.

For the first time in two weeks, XRP’s open interest has surpassed $1 billion.

On March 11, bulls surprised the market by causing XRP’s price to surge by 18.5% within a 24-hour period, reaching a peak of $0.74 in 2024. However, a quick wave of profit-taking led to a correction below $0.60 within a week.

After a week of consolidation, recent trends 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 active futures contracts for a specific cryptocurrency. It 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 represents 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 indicates that most traders are betting on the current upward trend to continue, leading to rapid capital inflows.

While XRP spot prices increased by 19.4% between March 20 and March 26, open interest only rose by 15%. This suggests that the current rally is primarily driven by organic spot demand rather than speculative trading in the futures market.

Bullish traders have doubled their leveraged positions to take advantage of the rally.

The fact that XRP’s price is outpacing the growth in open interest suggests that there are stronger fundamental factors behind the ongoing rally. These factors include increased adoption and positive developments in the Ripple-backed blockchain network, such as the launch of automated market maker (AMM) functionality.

XRP’s funding rate has increased from 0.01% to 0.02% between March 23 and March 26, indicating that bullish traders have more than doubled their leveraged positions in the past 72 hours.

An increase in funding rate typically indicates a willingness to take risks in anticipation of further upside. This means that long traders are paying higher fees to short traders to keep their perpetual future positions open, expecting to make larger profits when spot prices rise.

When short traders observe a rapid increase in leverage and aggressive risk-taking among long traders, they often make spot purchases to hedge their bets and mitigate potential losses if the rally surpasses 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 bullish traders’ leverage activity, the organic growth in spot demand, and potential hedging strategies from short traders, it appears that XRP’s price is poised for another increase above $0.75.

The relative strength index (RSI) technical indicator, currently at 53.2, supports this bullish price forecast for XRP. It suggests that despite the 17% price gains in the past week, there is still significant room for growth before XRP markets reach overbought levels.

If XRP can break above the next significant resistance level at $0.70, indicated by the upper Bollinger band, a major breakout towards $0.75 could be in store.

However, in a bearish market downturn, the $0.57 support level, indicated by the lower limit of the Bollinger band, will be crucial to monitor. A significant downward movement below this range could result in bears regaining control of the market momentum.