Ripple (XRP) witnessed a price increase of over 4.5 percent in the last 24 hours. Thus, it was among the best performers of the day in the top 100 by market value. However, the most significant increase occurred in spot exchange and derivative volume. Both more than doubled on October 4.
While Bitcoin and Ethereum transaction volume decreased, XRP exploded!
At the time of writing, CoinMarketCap and CoinGlass data show impressive increases in spot exchange and derivatives volume over the last 24 hours. It recorded a 104% increase in spot exchange volume from the first source. There was an increase of over 185% in derivative transaction volume for XRP. Notably, XRP recorded a 24-hour volume of close to $1.8 billion. This corresponds to 6.36% of the crypto asset’s market value, which is close to $28.24 billion. Because the token was traded at $ 0.52 at the time of writing.
Despite this high volume of XRP changing hands on the spot market, the cryptocurrency created by Ripple is currently seeing a huge increase in demand for derivative contracts. Meanwhile, derivatives volume for both Bitcoin (BTC) and Ethereum (ETH) fell nearly 30% during the same period. Therefore, the explosion in XRP trading volume becomes more significant.
Trading demand in XRP derivatives is increasing
While XRP is seeing a 185% volume increase, the two leading projects by market cap are seeing volume losses of 35% and 29%, respectively, on CoinGlass’ crypto derivatives trend index.
Therefore, it means that crypto traders are mostly shifting their derivatives transactions towards XRP rather than other competitors. At the time of writing, XRP derivatives recorded a total flow of $3.16 billion. This is already twice as high as spot exchange volume. This amount also corresponds to three times the 24-hour derivative volume of ETH. However, it does not show any difference regarding the market value of both cryptocurrencies.
How will it affect the price of XRP?
Interestingly, as Open Interest volume increases, XRP investors are likely expecting another price increase for the token. Because both metrics are highly correlated, according to a chart from CoinGlass.
However, historical correlation does not mean that price will continue to follow this metric. Derivatives data also shows that there are currently more traders opening short positions than long positions.
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