According to Cointelegraph, analysts have raised concerns that Ripple's native XRP token might be experiencing a leverage-driven price surge. The asset's value has soared to levels not seen since 2021, prompting warnings from experts about potential volatility. On December 1, CryptoQuant analyst Maarten Regterschot highlighted a significant increase in open interest for XRP, a metric indicating open derivatives positions, which has surged by 37% in the past 24 hours. Regterschot cautioned that such sharp increases could lead to a rapid sell-off, advising investors to remain vigilant and manage risks appropriately.
Data from CoinGlass reveals that open interest in XRP has jumped by 30% over the last day, reaching a total of $4 billion across major exchanges and trading platforms. At the time of reporting, XRP is trading at $2.39, marking a remarkable 68% increase over the past month. The token has also seen a nearly 370% rise in the same period, with a 70% gain in the last week alone. XRP's rally began alongside other major cryptocurrencies like Bitcoin and Solana following Donald Trump's election victory on November 6. However, XRP has since outperformed these tokens, surpassing Solana and Tether by market capitalization to become the third-largest crypto asset by total value.
The impressive performance of XRP is attributed to several factors, including new partnerships, product developments from Ripple Labs, and speculation about an XRP exchange-traded fund (ETF). Additionally, there are unconfirmed rumors that Elon Musk might make a significant investment in XRP and Ripple. Asset manager 21Shares filed for an XRP ETF on November 1, 2024, which has heightened investor expectations that the Securities and Exchange Commission (SEC), potentially under new leadership in January 2025, will approve the ETF applications. These developments have contributed to the heightened interest and activity surrounding XRP, but analysts urge caution due to the potential for increased volatility.
