Clear regulations and upcoming technical changes are driving growth in XRP futures, with open interest zooming to record highs on Saturday as prices surged more than 20% in 24 hours.
XRP and US dollar-denominated open interest are at record levels as of Sunday, with more than 2 billion tokens (worth nearly $2 billion at current prices) in futures positions betting on further market volatility.
Long/short data shows that traders are somewhat biased towards shorts, with 51% betting on further price increases. (Although the ratio should theoretically remain 50:50 at all times, as there is always a short trade for every long trade, the bias provides insight into how smart traders position themselves over a very short time frame, such as 24 hours.)
Open Interest (OI) refers to the total number of outstanding derivative contracts that have not been settled for an asset.
A rise in both OI and prices usually indicates that new money is entering the market – indicating a bullish trend. On the other hand, if the price rises but the OI falls, the rally could be caused by short covering rather than new buying, possibly indicating a weaker trend.
XRP prices surged above $1.20 in the morning hours in the US on Saturday, pushing weekly gains to more than 87%, setting a three-year high for the token.
The gains in XRP started late Thursday when 18 US states filed suit against the SEC and commissioners, including Chairman Gary Gensler, accusing them of unconstitutionally overreaching the crypto industry.
The speculative optimism among traders is that a crypto-friendly Trump administration could benefit tokens tied to US-based companies, such as Ripple Labs (related to XRP) and Uniswap (UNI), as the companies are more involved in increasing the value for token holders. now that regulatory headwinds appear to have subsided.
Furthermore, a major fundamental development that could drive future gains in XRP is the upcoming RLUSD stablecoin from Ripple Labs, a company closely related to the issuance of XRP.
Ripple plans to use RLUSD in its cross-border payments product, providing liquidity, enabling faster and cheaper transactions, and potentially integrating with various decentralized finance (DeFi) protocols across multiple blockchains, as previously reported.
XRP has flatlined bitcoin (BTC) over the past 24 hours, posting a 2.7% gain in the broader crypto market, followed by the liquid CoinDesk 20 index (CD20).
