Ripple Price Bull Run Explained - Reasons & Future Speculations.
2021-04-09 | Eddy Morgan
Ripple [
XRP] price's journey to $1 USD this year has been nothing
in need of spectacular, considering
the continued SEC [Securities and Exchange Commission] lawsuit against Ripple filed earlier in December last year. The regulator alleges that Ripple [XRP] was a $1.3 Bln unregistered securities offering and both CEO Brad Garlinghouse and co-founder Christian Larsen
also are within the crosshairs.
Earlier on 6
th April, Ripple Labs was granted access to the United States SEC's documents "expressing the agency's interpretation or views" on
the topic of crypto assets.
Such news coincided with the explosive 75% rally in 30 hours, causing Ripple to
overcome the $1 USD price mark for
the primary time since March 2018.
It is worth noting that coincidently, on 5
th April, XRP price posted
a tenth gain following the 40% stake acquisition in Tranglo, an Asian
fiat money remittance company.
However, whatever might be the rationale behind such
a powerful move, investors' interest in XRP futures trading skyrocketed
as the open interest reached $1.2 Bln,
a new all-time high.
The 119% open interest hike earlier in 30 days caused XRP to retake the 3rd position, which had been lost to Polkadot [DOT], Litecoin [LTC], and Cardano [ADA] over the past
few months. As a comparison, Ethereum [ETH] futures open interest stood at $3.3 Bln just 3-months ago.
Even though futures buyers and sellers are evenly matched
in the least times, a healthy derivatives market permits larger players to participate. Once an asset gets enough hedging and arbitrage activity, its volume on spot exchanges tends to grow,
and therefore the cycle perpetuates.
As depicted above, Ripple [
XRP] spot volume over the past 30 days sums to $44.3 Bln, some 31% of Ether's.
No matter the worth move, as long
as the token continues
to draw in investors' attention, a healthy derivatives market creates a self-fulfilling growth path.
On
the opposite hand, price pumps unaccompanied by spot volume growth raise
the danger of huge sell-offs and shuns arbitrage traders.
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