The crypto currency XRP, which specializes in payments, was unable to reach new highs during the 2020-2021 bull market due to regulatory conflicts, but derivative transactions related to the token have been showing record movements, and here it is. This is the fastest rise in years.
The cryptocurrency's price has soared 50% this month, hitting a seven-year high above $3, extending a 240% rise over the past quarter, according to data source CoinDesk. In the past seven days alone, the price has increased by 30%, reaching a market capitalization of $176.75 billion, the third-highest level after stablecoin Tether.
According to a popular market analysis tool called the Relative Strength Index (RSI), XRP has recorded the fastest rally ever observed since the altcoin boom in January 2018. This measurement varies between 0 and 100 and measures the speed and change in price movement over a specific period of time (usually 14 days or 12 months).
XRP's 14-month RSI rose to 92, its highest level since October 2017, indicating that the momentum observed in the past 12 months is the strongest in seven years.
New traders will be quick to point out that an RSI reading above 70 indicates overbought conditions, indicating a bull market or possible correction. However, this is not always the case, as RSI only measures the speed of price change over a specific period of time.
The indicator may continue to flash the so-called overbought number for longer than the bears can remain solvent. According to the laws of motion, an object in motion will continue to move unless acted upon by an external force.
“Cryptocurrencies continue to recover from Monday’s drop, pushing BTC towards the $100,000 level.The overall market is recovering, with altcoins such as XRP and XLM standing out. It regained the third place among cryptocurrencies and surpassed the market capitalization of BlackRock,” said Diego Cárdenas. said an OTC trader at digital asset platform Abra in a note to CoinDesk.
“This surge is being driven by an increasing number of partnerships, the launch of Ripple’s stablecoin RLUSD, and speculation about a potential spot XRP ETF,” Cárdenas added.
Currently, XRP-specific factors and broader crypto market trends support continued bullish momentum.
Let's take trading volume as an example. The total value of the spot market tripled to more than $23 billion in the past 24 hours, confirming the price surge. Meanwhile, derivatives trading volume more than doubled to $34 billion, according to data sources Coingecko and Coinglass.
XRP perpetual futures open interest has surged to a record high of 2.34 billion XRP, and the funding rate, which measures the cost of maintaining a leveraged bet, has hovered around 13%. This is well below the overheated 100% in early December, which indicates excessive bullish leverage. In other words, the XRP market is much healthier and supports continued price appreciation.
Meanwhile, cryptocurrency market leader Bitcoin has risen above $100,000, helping slow core inflation in the US. Bitcoin strength often leads to increased risk-taking in the broader crypto market.
