Ripple’s price surged past $0.66 on March 25, marking a 17% increase for the week. Recent trends in the derivative markets indicate that traders are eager for further gains.
XRP has been following an upward trend along with the broader crypto market. The open interest for XRP crossed $1 billion for the first time in two weeks.
On March 11, bulls initiated a surprising breakout as XRP’s price soared by 18.5% in just 24 hours, reaching a peak of $0.74. However, a wave of profit-taking led to a correction below $0.60 within a week.
After a period of consolidation, the derivatives markets now show that bullish XRP traders are preparing for another significant price increase. The CoinGlass open interest chart provides a real-time view of active futures contracts for a specific cryptocurrency, reflecting market depth, liquidity, and investor interest.
XRP’s open interest reached $1.02 billion on March 26, the highest since March 14, indicating a net capital inflow of $150 million since the recent market dip on March 20. The increase in open interest during a price recovery phase suggests that traders anticipate the upward trend to continue.
While XRP spot prices rose by 19.4% between March 20 and March 26, open interest increased by only 15%. This suggests that the current rally is driven more by organic spot demand than speculative trading in the futures market.
Bulls are increasing leverage by 100% to capitalize on the rally, indicating strong fundamental factors behind the surge, such as adoption and positive ecosystem developments like the new automated market maker functionality on the Ripple network.
In response to the launch of automated market maker functionality, bullish traders in the derivatives markets have shown increased interest in high-risk leveraged positions. The funding rate for XRP has doubled between March 23 and March 26, indicating a rise in leveraged positions by bullish traders.
An increase in funding rate typically signals a willingness to take risks and expect further gains. This could lead to short traders making hedging purchases to mitigate potential losses, adding to market demand and potentially accelerating the price rally.
Drawing insights from the surge in bullish traders’ leverage activity, organic growth in spot demand, and potential hedging strategies, XRP’s price seems poised to surpass $0.75. The RSI technical indicator supports this bullish forecast, suggesting room for growth before approaching overbought territories.
If XRP breaks above the $0.70 resistance level, a breakout towards $0.75 could be imminent. However, if the market turns bearish, the $0.57 support level will be crucial to watch for a potential downward trend.