Why Is XRP Going Up: What’s Fueling the Ripple Rally

XRP Price Surge: What’s Driving the Bullish Momentum and What’s Next for Ripple?

Ripple’s XRP has been experiencing a remarkable rally, surging 20% over the past three days to reach $1.63—its highest level since the spring of 2021. This marks a significant 225% increase in the token’s value over the last month, drawing considerable attention in the cryptocurrency space. The surge has propelled XRP to a ranking of #6 among cryptocurrencies, and there are multiple factors contributing to this bullish movement.

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XRP Hits $1.63: Key Drivers Behind the Surge

Currently trading at around $1.62, XRP has risen by 11.09% in the past 24 hours. With a market capitalization of $92.7 billion, representing an 11.3% increase, and a 21.99% spike in its 24-hour trading volume to $8.63 billion, the surge in XRP's price highlights the growing investor confidence and robust trading activity in the market. Several key events are propelling XRP's ascent, ranging from legal victories to strategic business developments.

Ripple’s Legal Victory with the SEC

One of the most pivotal factors contributing to XRP's recent price surge is Ripple’s legal victory in its long-standing battle with the U.S. Securities and Exchange Commission (SEC). A U.S. court recently approved Ripple’s motion for a final judgment, suggesting that the lawsuit, which has been dragging on for over two years, may be nearing its conclusion. XRP supporters view this as a major turning point in the legal case, as a favorable outcome could clear any lingering doubts about XRP's legal status and pave the way for further growth.

Ripple’s legal challenges with the SEC have loomed over the cryptocurrency market for years, with the SEC’s classification of XRP as a security threatening to disrupt Ripple’s business operations. A favorable court ruling could lead to increased regulatory clarity for Ripple and other cryptocurrencies, with ripple effects across the entire digital asset market.

The sentiment around XRP has been further boosted by the news that SEC Chairman Gary Gensler, known for his strong stance against cryptocurrencies, is expected to step down in January 2025. Gensler’s departure has been met with optimism in the crypto community, as many believe that new SEC leadership could bring a more crypto-friendly approach, potentially benefiting XRP in the long run.

Ripple Burns RLUSD Tokens

In a significant development that has caught the attention of investors, Ripple recently burned almost all of its Ripple USD (RLUSD) tokens—46.67 million in total—removing them permanently from circulation. This move has sparked speculation about Ripple's future intentions with RLUSD and its potential impact on the broader Ripple blockchain ecosystem.

While the burn is viewed by some as a way to increase scarcity and drive up value, others are questioning what this means for Ripple’s stablecoin strategy moving forward. As RLUSD tokens were meant to act as a dollar-pegged stablecoin on Ripple’s network, the removal of these tokens could indicate changes to Ripple's plans in the stablecoin space. How this affects XRP’s price in the long run remains to be seen, but it has added another layer of intrigue to Ripple’s ongoing evolution.

Ripple's Tokenized Money Market Fund

Ripple is also making waves with its recent partnership with ArchaX, a UK-based RWA (real-world asset) exchange, to launch a tokenized money market fund on the XRP Ledger. This groundbreaking initiative provides tokenized access to a $3.8 billion U.S. Liquidity Fund, opening up new possibilities for large-scale institutional adoption of tokenized real-world assets. The partnership signals Ripple's continued push to integrate with traditional financial markets and expand the use cases of its blockchain technology.

The move is seen as a step towards bridging the gap between the traditional financial sector and the growing decentralized finance (DeFi) ecosystem. If successful, the tokenized money market fund could help drive institutional investment and bring greater legitimacy to Ripple’s network, further supporting the bullish sentiment around XRP.

ETF Proposal: A Possible Game-Changer for XRP

In addition to legal victories and business ventures, XRP’s performance is also being buoyed by developments surrounding the potential approval of an exchange-traded fund (ETF). Recently, Bitwise Asset Management filed a proposal with the SEC for an ETF featuring ten major cryptocurrencies, including XRP. The ETF would allocate 1.5% of its portfolio to XRP, and its approval by the SEC could pave the way for more institutional investors to gain exposure to Ripple’s token.

ETF approvals have historically been seen as a major catalyst for price increases in the cryptocurrency market, as they provide an easier and more regulated avenue for traditional investors to enter the crypto space. Should the SEC approve the Bitwise ETF, it is expected to trigger a wave of institutional interest in XRP, potentially pushing its price even higher.

XRP Open Interest and Liquidation Trends

XRP’s growing market interest is also reflected in its rising open interest, which currently stands at $2 billion, with perpetual contracts at $2 billion and futures contracts at $3.2 million. Open interest surged by 21.93% in just 24 hours, indicating a heightened level of investor activity. Bybit leads the charge with $948.2 million in open interest, followed by Binance and OKX at $783.7 million and $170.7 million, respectively.

Interestingly, XRP also saw $12.8 million in liquidations over the past 24 hours. Long liquidations accounted for $3.6 million, while short liquidations reached $9.2 million. These liquidation figures highlight the volatility in XRP’s price, and the liquidations of short positions suggest that many traders are betting on further price increases in the near term.

What’s Next for XRP?

Looking ahead, many analysts are predicting further upward momentum for XRP. According to Coingabbar, XRP’s recent breakout from a symmetrical triangle pattern could signal additional gains, with some projecting the asset could rise as high as $18 by mid-2025. Analyst Dark Defender, who applies Elliott Wave Theory to price prediction, forecasts that XRP could reach $5.8 before the end of the year, followed by a possible pullback to $4 before embarking on another bull run.

While these predictions are optimistic, it’s important to note that the cryptocurrency market remains volatile. Regulatory developments, especially regarding Ripple’s ongoing case with the SEC, will continue to be a major factor influencing XRP’s price. However, with growing institutional interest, increased legal clarity, and strong technical momentum, XRP appears poised for further gains in the coming months.

Conclusion

The current surge in XRP’s price reflects a confluence of favorable factors, from Ripple’s legal victories to strategic business developments and growing institutional interest. As XRP continues to gain momentum, investors are closely watching for further updates on Ripple’s legal case, the potential for an ETF approval, and the evolution of its stablecoin initiatives.

With the cryptocurrency market remaining dynamic, XRP’s bullish trajectory underscores the broader optimism surrounding the future of blockchain technology and digital assets. However, as always, investors are advised to proceed with caution, given the inherent volatility and risks in the crypto market.

Source: CoinCodeX

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Jhonbarland is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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