The XRP options market on Deribit has gained significant traction recently, with traders favoring call options above $1. This trend has caught the attention of market observers as it signals a potential shift in market sentiment toward the payments-focused digital asset.
The $1.10 call option is the most popular choice among traders. This specific option, set to expire on August 28, has garnered an open interest of 4.3 million contracts, which translates to $2.44 million, according to Amberdata’s tracking.
Many consider this spike in activity significant because the options market is still in its early stages.
XRP Call Option Surge
Experts interpret the surge in interest, which increased by 838,000 contracts in just five months, as a strong bullish signal.
BloFin’s head of options trading and research, Griffin Ardern, believes the heightened activity around the $1.10 call option likely reflects the traders’ long net positioning. He pointed out that the key level to watch is $0.75, which has served as a resistance point for XRP over the past two weeks.
If XRP manages to break through this level, it could lead to a rally that would drive prices above the $1.10 mark.
Arden also suggested that speculation around the potential approval of an XRP ETF in the United States could be responsible for this bullish sentiment.
Wen XRP ETF? pic.twitter.com/P4K1FJmKc9
— Nate Geraci (@NateGeraci) August 8, 2024
The possibility of institutional interest through an ETF could be a game-changer for XRP. It could follow a similar pattern with Bitcoin and Ethereum, whose respective ETFs were approved earlier this year.
Notably, this optimism comes on the heels of a significant legal development. Last Wednesday, U.S. District Court Judge Analisa Torres issued a final ruling in the ongoing legal battle between the SEC and Ripple Labs.
The court ruled that Ripple would pay a $125 million penalty while rejecting the SEC’s much larger $2 billion demand. Ripple saw this judgment as a win and has rekindled hopes of seeing an XRP ETF debut in the U.S. market.
Skepticism About the $1.10 Mark
Despite the excitement, not everyone is convinced that XRP will reach the $1.10 mark by the end of August. Martin Cheung, an options trader at Pulsar Trading Capital, expressed skepticism about the possibility of such a rally in such a short time frame.
Cheung acknowledged that XRP has seen significant gains this year, and there is speculation that XRP and Solana (SOL) might be the next crypto to see ETF approvals.
However, he cautioned that the timeframe is too tight for XRP to reach $1.10, even with the potential boost from an ETF announcement.
Cheung estimates that while prices could rise by up to 20% if an ETF is announced, $1.10 might still be out of reach by the expiration date.
Overall, the growing popularity of XRP options, especially the $1.10 call, reflects a mixture of optimism and caution in the market.
While the possibility of an ETF and legal victories fuel bullish bets, the uncertainty surrounding XRP’s ability to meet these expectations within a limited timeframe tempers the outlook.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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