XRP is gaining momentum as renewed interest in liquid staking tokens drives market optimism. Staking tokens tied to Ethereum protocols rebounded on Friday, with Lido (LDO) and Ethena (ENA) jumping 14% and 15% respectively, as traders took advantage of recent market dips.

Renewed Confidence Boosts Staking Tokens

The latest upward move follows a stretch of declining prices earlier in the week, triggered by shifting market sentiment. This sentiment reversal, commonly seen as a contrarian buy signal, encouraged investors to reenter the staking space.

Lido and Ethena have now reclaimed the price levels seen during their early August rally. That rally was stimulated by a pivotal announcement from the U.S. Securities and Exchange Commission (SEC), which clarified that liquid staking products do not qualify as securities.

Regulatory Clarity Sparks Bullish Sentiment

This guidance from the SEC was seen as a win for the DeFi sector, particularly Ethereum-based platforms that utilize staking to generate returns. Regulatory certainty has traditionally paved the way for broader participation, especially from institutional players.

An illustrative example of this trend is the growth of Figment, an institutional liquid-staking provider that has begun to outpace competitors. According to a recent report, Figment’s rising dominance is a strong indicator that large players are entering the staking ecosystem at an accelerated pace.

Charts showing strong price recovery for ENA and LDO following staking-related news.

Volume Spikes as Market Stabilizes

Trading activity surged in tandem with the price rally. Ethena’s (ENA) trading volume skyrocketed to $1 billion within 24 hours, while Lido (LDO) followed suit with an 83% jump, reaching $256 million, per CoinMarketCap.

At the same time, both bitcoin (BTC) and ether (ETH) maintained critical support levels, reassuring traders that the broader crypto market remained stable. This strength, evident in major coins, injected confidence into the altcoin space, including projects tied to Ethereum staking.

Liquidity Risks Remain

However, not all market indicators are unequivocally bullish. Ethereum’s validator queue currently holds over 825,000 ETH — equivalent to approximately $3.8 billion — waiting to be unstaked. Once released, this massive volume could either be sold quickly for profit, which may suppress prices, or be restaked elsewhere to chase higher returns.

Either route could generate significant volatility in the staking market, potentially dampening further upward movement.

Related: XRP Price: $12M Max Pain for Bears

Still, the broader message is clear: trader interest in staking tokens is intensifying, propelled by regulatory clarity and increasing institutional participation. This momentum is likely to continue reshaping the decentralized finance ecosystem in the weeks ahead.