XRP Futures Open Interest Hits New Record of $1.2bln

XRP, the native crypto of Ripple, has recorded exceptional rally to reach $1 in 2021, considering the continuing Securities and Exchange Commission lawsuit that was filed on December 2020. The market dog has blamed XRP offering for $1.30 billion was indeed an unregistered securities offering and both CEO Brad Garlinghouse and co-founder Christian Larsen are also involved in the process.

Ripple Labs was given access to the SEC’s records “expressing the agency’s interpretation or views” regarding the subject of cryptocurrencies. The news matched with a break out rally resulting in a gain of 75%. The rally enabled XRP to break above the $1 level for the foremost time since March 2018.

Simultaneously, XRP recorded a 10% gain following Ripple’s investment in Tranglo, a payment processing firm in Asia, for a stake of 40%. Irrespective of the reason behind the initiative, investors’ curiosity in XRP futures trading surged as open interest hit $1.20 billion, which is a fresh all-time peak.

The open interest rose by 119% in 30 days, paving way for XRP to regain the third spot, which was lost to Polkadot’s DOT, Cardano’s ADA and Litecoin (LTC) in the last couple of months. In comparison, Ether (ETH) futures open interest was $3.30 billion three months back.

Al though futures buyers and sellers remained evenly matched during all times, a strong derivatives market will be accommodative for big traders to take part in the market. After an asset sees adequate hedging and arbitrage activity, its volume on spot market continues to grow and the cycle sustains.

As portrayed above, XRP’s spot volume in the last thirty days adds to $44.30 billion, representing 31% of Ether’s. Irrespective of the price rally, until the token draws attraction from investors, a robust derivatives market establishes a sustaining growth cycle.

On the contrary, price rallies without any increase in spot volume pushed the threat of big sell-offs and discourage arbitrage traders.

In the meantime, signal from VORTECS™, an indicator owned by Cointelegraph Markets Pro, started to signal a bullish view of XRP on April 5 while the cryptocurrency’s price looked like halted at $0.72.

The VORTECS™ Score is based on an algo matching of past and prevailing market environment drawn from a compounding of data points such as trading volume, market sentiment, Twitter activity and latest price movements.

As indicated in the chart, XRP’s VORTECS™ Score changed to green on April 5 and signaled bullishness as the price rose to a high of $1.10 on April 6, reflecting a gain of 53% in the past 36 hours.
Even though the indicator stays neutral at present, the price of XRP could further gain if additional positive news regarding the SEC lawsuit comes up.