Ripple’s XRP token accumulated close to $1 billion in open interest over the weekend, while its price hovers around $0.61 at press time, data from CoinGlass shows.
What’s different about XRP price action?
While the top two cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), fell 1.5% and 2.3% last week, XRP rose 4.1% during the same period. Several factors could explain XRP’s counter-trend price action.
For example, digital asset manager Grayscale Investments recently launched a closed-end XRP Trust in the US, allowing institutional investors to gain exposure to one of the top ten cryptocurrencies by reported market capitalization.
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Grayscale Confidence rose by more than 11% in one week, suggesting strong institutional demand for the seventh largest crypto asset.
The launch of the Trust also fueled speculation about the potential approval of an XRP exchange-traded fund (ETF) soon. If the US Securities and Exchange Commission (SEC) approves an ETF based on XRP, it will become only the third digital asset with its own ETF.
Another important development in the Ripple ecosystem is the anticipated launch of its US dollar-pegged stablecoin, RLUSD. Currently, X crypto analysts are closely watching the stablecoin in private beta tests on the XRP and Ethereum networks.
According to a recent to update480,000 RLUSD was minted in the RLUSD Treasury, signaling the stablecoin’s active development ahead of its integration into Ripple’s services, including its cross-border payment products. The stablecoin can also be used in decentralized finance (DeFi) protocols on blockchains.
Implications of Increasing Open Interest
Data CoinGlass indicates that open interest in XRP rose to over $1 billion over the weekend, before falling to around $945 billion at press time. Spot trading volume over the last 24 hours is slightly above $2 billion.
An increase in open interest typically indicates an increase in market activity, suggesting that more contracts are being opened. This could signal expectations of a price movement in either direction depending on prevailing market sentiment. Notably, XRP open interest was last recorded around the $1 billion mark in March 2024.
As for price action, crypto analysts have divided opinions on XRP. Ripple Labs’ recent legal victory over the SEC provided altcoin bulls with optimism, with one analyst predicting that if the token overcomes key resistance levels, it could rise to between $16 and $20.
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Meanwhile, another crypto analyst, Carl Runfelt, highlighted a multi-year bullish triangle pattern on the token’s chart. He noted that if XRP breaks the pattern and goes parabolic, it could rise over 200% within weeks.
On the contrary, XRP inability Breaking the $0.60 resistance level decisively could see the token retest the $0.55 support level. XRP trades at $0.61 at press time, down 1.6% in the last 24 hours.
Featured image from Pixabay, charts from CoinGlass.com and Tradingview.com
