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Ripple’s price soared past the $0.66 mark on March 25, experiencing a 17% increase within the span of a week. This surge in price indicates that traders are eagerly anticipating further upward movement in the market.

Over the past week, Ripple (XRP) has been following the overall trend of the larger cryptocurrency market, steadily climbing in value.

On March 11, the bulls surprised everyone with a sudden breakout, causing the price of XRP to surge by 18.5% within a 24-hour period, reaching a peak of $0.74. However, profit-taking ensued, leading to a correction that brought the price 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 value of active futures contracts for a specific cryptocurrency. It serves as an indicator of the market’s depth, liquidity, and overall investor interest.

On March 26, XRP’s open interest reached $1.02 billion, the highest it has been 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 banking on the current upward trend to continue, leading to the rapid influx of capital.

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

The outpacing growth of XRP price compared to open interest indicates that fundamental factors, such as increased adoption and positive ecosystem developments, are fueling the ongoing rally. One such development is the introduction of automated market maker (AMM) functionality on Ripple’s blockchain network, which has been praised by Ripple’s Chief Technology Officer David Schwartz.

In response to the rally, speculative traders in the derivatives market have increased their appetite for high-risk leveraged positions.

CoinGlass’s funding rate metric measures the percentage of fees paid between long traders and short position holders in the derivatives market.

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

Typically, an increase in funding rate signifies a willingness to take on more risks in anticipation of further price increases. Long traders pay higher fees to short traders to maintain their perpetual future positions, expecting to book larger profits when spot prices rise.

When short traders observe a significant 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 surpasses their margin-call price. These hedging purchases by short traders could contribute to the growing market demand and further accelerate the price rally in the coming days.

Taking into account the 100% surge in bullish traders’ leverage activity, the organic growth in spot demand, and potential hedging strategies from short traders, it appears that XRP is poised for another upward movement above $0.75.

The relative strength index (RSI) technical indicator, which currently stands at 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 enter overbought territories.

Therefore, if XRP can break through the significant resistance at $0.70 indicated by the upper Bollinger band, a major breakout toward $0.75 could be on the horizon.

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