Payments-focused cryptocurrency XRP, which failed to reach new highs during the 2020-21 bull run due to regulatory challenges, is seeing its fastest rise in years, token experiencing record activity.
The cryptocurrency’s price jumped 50% to a seven-year high above $3 this month, extending last quarter’s 240% rise, according to data source CoinDesk. Prices have increased by 30% in the last seven days alone, bringing the market capitalization to $176.75 billion, the third highest ahead of stablecoin Tether.
XRP is experiencing the fastest rally seen since the January 2018 altcoin boom, according to a popular market analysis tool called the relative strength index (RSI). The metric ranges from 0 to 100, measuring the speed and change of price movement over specific time periods, typically 14 days or 12 months.
XRP’s 14-month RSI rose to 92, the highest level since October 2017, indicating that the momentum seen over the past 12 months is the strongest in seven years.
Novice traders are quick to point out that RSI readings above 70 indicate overbought conditions and the potential for a respite or bullish correction. However, this is not necessarily the case, as the RSI simply measures the speed of price changes over a specific time period.
Indicators may continue to show the so-called overbought reading for longer than bears can remain solvent. As the law of motion says: an object in motion will remain in motion unless it is acted upon by an external force.
“Crypto continues its recovery from Monday’s decline, with BTC pushing towards the $100,000 mark. The broader market is rebounding, with altcoins like XRP and XLM standing out. currencies and surpassed the market capitalization of BlackRock,” Diego Cardenas, OTC trader at digital asset platform Abra, said in a note to CoinDesk.
“This push is driven by a growing number of partnerships, the launch of Ripple’s RLUSD stablecoin, and speculation over a potential XRP spot ETF,” Cardenas added.
Currently, XRP-specific factors, combined with broader crypto market dynamics, support the current bullish momentum.
Take for example transaction volumes. The spot market figure tripled to over $23 billion in the last 24 hours, confirming the price surge. At the same time, derivatives volumes more than doubled to $34 billion, according to data sources Coingecko and Coinglass.
Open interest on XRP perpetual futures reached an all-time high of 2.34 billion XRP, with funding rates representing the cost of holding leveraged bets hovering around 13%. This is well below the 100% overheating in early December, which signaled excessive bullish leverage. In other words, the XRP market is much healthier and supports continued price growth.
Meanwhile, crypto market leader bitcoin surpassed $100,000, encouraging a slowdown in underlying inflation in the United States. Bitcoin’s strength often translates into increased risk-taking in the broader crypto market.
