Payments-focused cryptocurrency XRP, which struggled to set new price highs during the 2020-21 bull run due to ongoing regulatory challenges, is now experiencing its fastest ascent in years. This revival is marked by record activity in derivatives tied to the token, signaling renewed investor interest.
This month, XRP’s price has surged by an impressive 50%, reaching seven-year highs above $3. This increase extends a remarkable 240% rally observed over the past quarter, as reported by CoinDesk. Notably, in just the past week, XRP’s price has advanced by 30%, elevating its market capitalization to $176.75 billion, making it the third-largest cryptocurrency, surpassing stablecoin tether.
According to a popular market analysis tool known as the relative strength index (RSI), XRP is undergoing its fastest rally since the altcoin boom of January 2018. The RSI, which measures the speed and change of price movement over specific periods, currently indicates strong buying momentum.
XRP’s 14-month RSI has risen to an impressive 92, a level not seen since October 2017, suggesting that the momentum gained over the past year is at its peak for the past seven years.
While novice traders might interpret RSI signals above 70 as indicative of overbought conditions and a potential market correction, it’s crucial to note that the RSI is merely a measure of price changes over time. Historical data shows that such readings can persist longer than many market participants expect.
“Crypto continues its recovery from Monday’s drop, with Bitcoin (BTC) pushing towards the $100k mark. The broader market is rebounding, with altcoins like XRP and XLM standing out. XRP has reclaimed the third spot among cryptocurrencies, surpassing BlackRock’s market cap,” commented Diego Cardenas, an OTC trader at digital asset platform Abra, in a note to CoinDesk.
Cardenas also highlighted that the current surge in XRP’s price is driven by a growing number of strategic partnerships, the recent launch of Ripple’s stablecoin RLUSD, and speculation surrounding a potential spot XRP ETF.
As XRP-specific factors merge with broader market dynamics, they are collectively underpinning this bullish momentum. For instance, trading volumes in the spot market have tripled to over $23 billion in just 24 hours, affirming this price surge. Moreover, derivatives trading volumes have more than doubled to $34 billion, according to data from Coingecko and Coinglass.
XRP’s perpetual futures open interest has reached a record high of 2.34 billion XRP, with funding rates—indicative of the costs associated with leveraged positions—hovering around 13%. This is a stark contrast to the overheated 100% rate observed in early December, signaling a healthier market poised for continued price enhancements.
In the broader crypto landscape, Bitcoin’s impressive climb past the $100,000 threshold has intensified the market’s risk appetite, driven in part by a slowdown in U.S. core inflation. Typically, strength in Bitcoin translates to increased adventurousness among investors across the cryptocurrency spectrum.
