XRP Options Market Surges as Traders Bet on $1.10 Price Spike by End of August

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As a seasoned analyst with over two decades of experience in traditional and digital markets, I’ve seen my fair share of market surges and dips. The current activity in the XRP options market on Deribit is indeed intriguing, especially given its relative youth.

As a researcher delving into the dynamic world of digital currencies, I’ve noticed an intriguing uptick in activity within the XRP options market on Deribit, specifically concerning call options that predict a spike in the cryptocurrency’s price. This surge has sparked discussions among some analysts, who are contemplating whether this trend might be connected to the anticipated launch of a US-based XRP Exchange Traded Fund (ETF), an event many have been eagerly waiting for.

On August 12, 2024, the XRP $1.10 call option with an expiration date of August 28 holds the highest number of open contracts on the exchange, amounting to 4,347,000 contracts worth approximately $2.44 million. This is a notable figure given that the XRP options market is merely five months old, as indicated by data from Amberdata.

Open Interest Soars but Can the Price Break Resistance?

Over the past five months, the number of active wagers has significantly increased by approximately 838,000 contracts, reaching a new high. Financial analysts such as Griffin Ardern, who leads options trading and research at BloFin, interpret this surge as evidence of a “long position” strategy, where investors are betting that prices will rise.

In simpler terms, Ardern mentioned that based on the gamma distribution, it seems like an expiration date on Aug. 30 involves a long position in something. If the resistance level of $0.75, which has held strong over the past two weeks, can be breached, then the price of XRP could potentially surge beyond $1.10.

Prime Minister Ardern noted that there might be institutions seeking to file for a XRP Exchange-Traded Fund (ETF) in the United States, potentially contributing to a significant increase in prices. This observation coincides with the recent price surge of XRP following the U.S. Securities and Exchange Commission’s (SEC) decision regarding Ripple Labs’ unregistered sales case for XRP.

Although the Securities and Exchange Commission (SEC) succeeded in imposing a penalty of $125 million, their demand for a $2 billion fine was turned down. Ripple views this outcome as a triumph, sparking renewed optimism about the prospect of an XRP Exchange-Traded Fund (ETF) launch within the United States, much like the Bitcoin and Ether ETFs that were approved earlier in 2021.

XRP $1.10 Price Target Debate

While some people are hesitant that the price will hit $1.10 by August 28, Martin Cheung, an options trader at Pulsar Trading Capital, voiced his doubts. “XRP has experienced a substantial rally this year,” he noted, referring to the high interest in buying call options for $1.10, suggesting that there’s a strong expectation that upcoming ETFs will be for XRP and Solana.

“Cheung added that the upcoming end of August seems imminent, and there’s a possibility of an XRP ETF announcement which could boost prices by approximately 20%. However, he believes reaching $1.10 might be a stretch.”

A significant increase in XRP option trading suggests positive expectations for the digital currency. Although reaching a short-term goal of $1.10 may seem challenging, the overall mood indicates enthusiasm about the possibility of an upcoming US-listed XRP Exchange Traded Fund (ETF).

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2024-08-12 15:30