XRP rises as leverage spikes across derivatives markets

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XRP price opened on April 6 on a bullish note as its leveraged markets surged by more than 5% in 24 hours.

XRP price rose 4.06% over the past 24 hours, trading at about $1.35 at press time. As such, the token’s market capitalization climbed over 4% to reach $82.9 billion at the time of publication.

XRP/USD 24-hour chart. Source: Finbold

The price of this token gained in tandem with its Open Interest (OI) – the net derivatives open today across all crypto exchanges – in the past 24 hours. As the altcoin increased today, its OI jumped by around 5.73%, as per analytics from CryptoQuant.

XRP price and OI change in 24 hours. Source: CryptoQuant

Meanwhile, the XRP’s OI-weighted Funding Rate, the mechanism that keeps the perpetual contract value anchored to the spot price, turned positive on Monday, based on metrics from CoinGlass. As such, its price surge today was bolstered by bullish derivative traders across all crypto exchanges.

XRP OI-weighted funding rate. Source: CoinGlass

What’s next for the XRP price?

Despite the intraday surge in derivatives activity, the price of this token has struggled to sustain momentum, constrained by weak demand from spot buyers. As Finbold recently pointed out, the liquidity situation of XRP on Binance – the largest cryptocurrency exchange by traded volume – has remained at its absolute floor for nine months, thereby signaling low interest from institutional investors.

Spot XRP ETF weekly flow. Source: SoSoValue

During the first week of April, the United States spot XRP exchange-traded funds (ETFs) recorded a net cash outflow of approximately $3.56 million, resulting in a total net assets of $916.73 million, as per data from SoSoValue.

With the spot XRP ETF quarterly inflow having dropped by over 96% in the first quarter, this sharp decline in ETF investment has limited its upward price momentum. A sustained recovery for the price of this token will be possible through a rebound in inflows for its traded funds and derivatives markets.

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