May’s Tepid XRP Price Meets Heightened Bullish Interest – A Divergence to Watch

XRP Ends May in Market Uncertainty, but Options Traders Maintain Bullish Stance

XRP, the token utilized by Ripple Labs for cross-border payments, closed May displaying signs of indecision in its price action, yet the options market suggests that bullish traders remain firmly in control.

The cryptocurrency formed a “doji” candlestick in May, a technical pattern indicating indecision, with a long upper wick showing buyers pushed XRP up to $2.65 before sellers stepped in and pushed prices back near where the month started. This signals that the recent rally from April’s lows near $1.60 may be losing momentum.

Reflecting some caution, traders purchased put options at the $2.40 strike expiring May 30 to hedge against potential downside.

Despite this price hesitation, options data from Deribit reveals strong bullish interest. Open interest is concentrated in call options above the current spot price near $2.16, indicating ongoing optimism about XRP’s upside potential.

Luuk Strijers, CEO of Deribit, told CoinDesk, “XRP’s open interest is steadily climbing, with a large cluster of call options between $2.60 and $3.00+. This demonstrates that traders expect higher prices ahead.”

Notably, the $4 strike call option holds the largest notional open interest at $5.39 million, while $3 and $3.10 strike calls each have open interest exceeding $5 million. Total monthly volumes hover between $65 million and $70 million, with Deribit accounting for over 95% of this trading.

Underlying this positive sentiment are XRP’s expanding role in cross-border payments and the anticipation of a U.S. spot XRP ETF approval. Ripple’s technology addresses inefficiencies in traditional SWIFT payments, targeting a B2B payments market expected to grow from $31.6 trillion in 2024 to $50 trillion by 2031.

Additionally, XRP’s increasing use as a corporate treasury asset adds further support to its long-term prospects.