The payments-focused cryptocurrency XRP has surged by more than 3.5% in the last 24 hours, with volume in the options market indicating bullish expectations.
Since July 1, popular call options for July 25 at strikes of $3.00 and $4.00, along with the September 28 expiry call at the $2.80 strike, have seen the most trading activity, according to data from Amberdata.
A call option allows the buyer the right to purchase the underlying asset at a specified strike price at a later date, reflecting a bullish market sentiment. For example, the $3 strike call buyer bets that XRP’s spot price will exceed that level by July 25. On Deribit, one options contract corresponds to one XRP.
Analyzing the trading flows shows that the high volume of the $3 calls mainly arises from buy orders, with 2 million contracts changing hands in the last 24 hours. Conversely, in the $2.80 call, investors have predominantly acted as sellers.
The $3 call option also leads in open interest increases over the past week.
The surge in activity in higher strike calls comes amid increasing optimism regarding a potential spot ETF debut in the U.S. Analysts now estimate a 95% likelihood that the U.S. SEC will approve a spot XRP ETF—almost a formality.
On Wednesday, Ripple, which uses XRP for cross-border transactions, revealed its application for a national banking license at the Office of the Comptroller of the Currency (OCC).
“If approved, we would achieve both state (via NYDFS) and federal oversight, establishing a new standard for trust in the stablecoin market,” stated Ripple’s CEO Brad Garlinghouse.
XRP/BTC breakout
XRP’s price denominated in Bitcoin, represented by the Binance-listed XRP/BTC pair, appears poised for a rise after breaking out of a falling wedge pattern.
This bullish reversal pattern is characterized by two converging trend lines that signify a diminishing price range. The convergence suggests that sellers are gradually losing power. A breakout above the upper trend line is seen as a confirmation of renewed bullish dominance.
XRP/BTC has surged above the upper trend line, confirming this bullish breakout. The pattern implies that the correction from April’s highs has concluded and the broader bullish trend for XRP has resumed.
While the breakout indicates a bullish trend, the popular moving averages—the 50-day, 100-day, and 200-day SMAs—are not in agreement. Both the 50- and 100-day SMAs are trending downward and have recently crossed below the 200-day SMA. However, it is important to note that moving averages lag, placing less importance on the bearish indicators compared to the bullish wedge breakout.
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