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02 October, 2024

XRP Open Interest Surges: Is the Token Ready for a Breakout?

02 October, 2024

XRP Open Interest Hits $1 Billion: Signs of Renewed Interest

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Ripple’s XRP token has seen a significant spike in open interest, reaching close to $1 billion over the weekend. This surge comes amidst a broader market downturn for cryptocurrencies, with Bitcoin (BTC) and Ethereum (ETH) experiencing declines over the past week. What’s fueling this unusual upward momentum for XRP?

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Institutional Investment and ETF Hopes

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Digital asset manager Grayscale Investments recently launched a closed-end XRP Trust in the US, opening the doors for institutional investors to gain exposure to the seventh-largest cryptocurrency by market capitalization. This move has sparked speculation about a potential XRP exchange-traded fund (ETF) being approved soon. An XRP ETF would be a significant development, as it would be only the third digital asset to receive such approval, potentially boosting XRP’s adoption and price.

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Ripple’s Stablecoin, RLUSD, Gains Traction

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Another key factor driving XRP’s momentum is the anticipated launch of Ripple’s USD-pegged stablecoin, RLUSD. Currently undergoing private beta testing on both the XRP and Ethereum networks, RLUSD has seen 480,000 tokens minted at the RLUSD Treasury. This indicates active development of the stablecoin before its integration into Ripple’s services, including its cross-border payment products. RLUSD’s potential to be utilized in decentralized finance (DeFi) protocols across various blockchains further enhances its appeal.

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Interpreting the Open Interest Surge

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The surge in XRP’s open interest, as reported by CoinGlass, points to increased market activity. This signifies that more contracts are being opened, suggesting that traders are expecting a potential price move in either direction. The last time XRP’s open interest reached the $1 billion mark was in March 2024.

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Analyst Opinions Remain Divided

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While Ripple Labs’ recent legal victory over the SEC has infused optimism among XRP bulls, analysts still hold mixed views on the token’s future. Some predict that if XRP overcomes key resistance levels, it could surge to between $16 and $20. Others highlight a multi-year bullish triangle pattern on the token’s chart, suggesting that a breakout could lead to a more than 200% price increase within weeks. However, if XRP fails to break through the $0.60 resistance level, it could potentially retest the $0.55 support level.

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As XRP hovers around $0.61 at press time, it’s crucial to stay informed about market developments and follow the token’s price action closely.

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**Disclaimer:** This content is for informational purposes only and should not be construed as financial advice.