Nov 18, 2024


6thTrade


XRP has reached its highest price in three years, driven by a surge in futures open interest and growing trader activity, signaling bullish market sentiment. The token, managed by Ripple Labs, is currently trading at $1.06, an 80% weekly gain despite pulling back from its $1.20 peak over the weekend, according to CoinGecko data.

XRP Rides Market Momentum

The crypto market has been energized by anticipated U.S. political shifts following President-elect Donald Trump’s victory. This has boosted interest in major cryptos, including XRP, which has shown a strong uptrend since the election. Meme coins and large-cap assets have also rallied, reflecting a broader bullish sentiment.

Futures Market Signals Optimism

Futures open interest for XRP has reached record levels near $2 billion, per CoinGlass data, indicating heightened speculative trading. High open interest often correlates with increased volatility as traders leverage positions to profit from anticipated price movements.

Nick Forster, founder of the DeFi protocol Derive, explained, “The spike in XRP futures open interest signals growing trader optimism and speculative activity. Combined with consistently positive funding rates, this suggests traders are capitalizing on basis trade opportunities in XRP.”

Basis trading involves profiting from price differences between spot and futures markets. Forster added that XRP’s allure within the trading community highlights speculative confidence as participants position for potential price swings.

Regulatory and Political Shifts Boost Sentiment

Speculation about a possible resignation of SEC Chair Gary Gensler following Trump’s inauguration in January has added fuel to the bullish outlook. Gensler has been criticized for his regulatory approach toward crypto, including Ripple’s ongoing legal battle with the SEC.

Ripple CEO Brad Garlinghouse expressed optimism about the possibility of an XRP exchange-traded fund (ETF) being approved in the U.S. following the recent approvals of Bitcoin and Ethereum ETFs. If approved, such an ETF would allow investors to gain exposure to XRP without holding the asset directly.

The SEC’s lawsuit against Ripple, filed in December 2020, alleged that XRP sales constituted unregistered securities offerings. While a 2023 court ruling partially cleared XRP, the case remains unresolved, with final briefings due in January 2025.

Market Anticipation and Future Outlook

Traders are optimistic that regulatory clarity, coupled with a pro-crypto policy shift under the new administration, could enhance XRP’s adoption and market confidence. Rumors that Garlinghouse might advise Trump on crypto policy have further bolstered sentiment.

Portfolio manager Pratik Kala from Apollo Crypto commented, “XRP’s recent rise is driven by speculation around regulatory shifts and the potential for an ETF. These developments are fueling hopes of capturing significant upside in the market.”

With political and regulatory changes on the horizon, XRP’s current momentum reflects high investor expectations for its future trajectory.