The recent activity surrounding XRP has captured major attention in the crypto market, as traders seem to remain confident despite a noticeable downturn. Over the past week, XRP experienced a 10% decline. However, investor behavior in the derivatives space — specifically perpetual contracts — indicates rising optimism for a rebound.
Perpetual contracts, or “perps,” which are futures contracts with no set expiration, have seen a significant increase in long positions. This bullish lean suggests that some market participants are betting on a near-term recovery, possibly even a sharp upward movement. Analysts point to this growing confidence as a key signal that XRP could be primed for another rally.
According to data sourced from Coinglass, the volume of long positions on XRP perps is now three times greater than short bets. This sharp skew is the most pronounced since April 7, the date that marked the beginning of a nearly 40% surge in XRP, peaking at $2.33 within three weeks.
This pattern has already resulted in tangible profits for savvy traders. Notably, one major investor opened a $140,000 long position on XRP at $1.85. Despite the decline in spot price, that trade currently reflects a 250% gain. The asset — widely used by Ripple for streamlining cross-border transactions via blockchain — sat at $2.10 on Tuesday, as the momentum from last month’s rally began to wane.
Interestingly, XRP’s perp market reveals a stark contrast to other major cryptocurrencies. Ethereum and Solana perp markets show a relatively balanced distribution between bulls and bears. Meanwhile, Bitcoin’s perp markets lean more bearish, suggesting more caution from traders regarding its near-term prospects.
Options markets are also reflecting renewed optimism for XRP. Earlier this year, options traders largely bet that XRP would struggle to stay above the critical $2 mark. However, new data from derivatives platform Deribit shows a notable shift toward call options targeting levels above $2.20, indicating rising expectations of a breakout.
Yet, this optimism isn’t uniformly held across all trading platforms. Prediction market Polymarket paints a less rosy picture for XRP in the near term. One notable bet gives XRP a 59% likelihood of closing May below $2.19. Another prediction, focused on broader price performance, leans even more bearish with an 82% chance that XRP dips to around $2, and a similarly prominent bet foresees a decline to $1.90.
These cautious views are a reversal from sentiment seen in April, where Polymarket bettors heavily favored XRP reaching $2.40. That target, however, wasn’t achieved, possibly intensifying skepticism among some traders as May unfolds.
Overall, while XRP’s price has cooled, derivatives trading activity and certain data points suggest many traders are eyeing a rebound. The crypto’s utility in facilitating seamless international payments continues to support long-term bullish fundamentals. If the current trend in rising long positions holds, XRP could be setting up for another upward move — reinforcing its resilience in a volatile market.
