XRP is shaping up to be the cryptocurrency market’s biggest volatility bet.
Coinbase Markets says crypto options currently imply a one-standard-deviation move of roughly 8.9% for XRP through Sept. 27. That tops Solana at 8.0%, Ethereum at 6.9%, and Bitcoin at 5.0%.
More notably, XRP’s expected move is roughly 1.79 times its historical median seven-day move of about 5%. It has the widest volatility premium among the four major cryptocurrencies tracked by Coinbase.
XRP is changing hands at $1.51 at press time. Hence, an 8.9% move would correspond to approximately $1.37 on the downside or $1.64 on the upside if applied symmetrically to the spot price.
It is important to note that the options market is not predicting which of those directions XRP will take. Traders are paying for protection or exposure to a rather significant price swing.
XRP derivatives activity explodes
XRP derivatives activity has recorded a sharp increase.
CoinGlass data shows XRP futures generated approximately $6.8 billion in trading volume over the past 24 hours.
Open interest has climbed to approximately $3.56 billion while XRP trades near $1.51, up roughly 6.7% over the past 24 hours.
The latest rally has taken a significant toll on bearish traders. Approximately $19.2 million worth of XRP positions were liquidated during the past 24 hours. Short positions accounted for roughly $17 million of that amount.
Positioning is now increasingly tilted in the opposite direction. The Binance XRP/USDT long-to-short account ratio stands at roughly 2.18.
That creates a rather peculiar setup. The first stage of the rally was capable of forcing bearish traders out of their positions. However, increasingly crowded long positioning could become a problem for the bulls if XRP stumbles.
Over the past 24 hours, CoinGlass shows roughly $1.81 billion in futures inflows and nearly the same amount in outflows. Over seven days, however, cumulative net flow remains negative by roughly $293 million.
Such conditions can produce large moves in either direction.
