The price value of Ripple’s native token XRP has appreciated this month by 28% despite the fact that the market leaders Bitcoin and Ether have reduced in value by 4.5% and 17% respectively. This glimpse of hope has made traders buy bullish bets in a futures position with the hope that the coin will be spawned into a bullish move towards the end of the year.
The key underlying factor that has motivated traders to make XRP year-end upside call is the anticipated resolution of the lawsuit between one of the affiliations of XRP and the U.S securities and exchange commission. Confirming this in his words of Dick Lo, the founder and CEO of TDX strategies, stated:
“We have seen interest in buying XRP year-end upside call options in anticipation of a resolution in the ongoing lawsuit with the U.S. Securities and Exchange Commission,”
As a prequel to this, in December 2020, the securities and exchange commission filed a lawsuit against the San Francisco-based payment protocol developer Ripple Labs (which has close ties with XRP). The basis of this lawsuit was that Ripples had violated the securities laws by raising $1.3 billion through XRP sales to investors. Consequently, Ripple’s native digital token experienced a massive depreciation while other cryptocurrencies were in their bullish mode.
This lawsuit is envisaged to be resolved soon in favour of Ripple after Ripples labs has filed for a summary judgment with the expectations of a final ruling coming before the end of this year. The resolution of this lawsuit is expected to be followed by the appreciation of XRP which depreciated as a result of the initial declaration of the lawsuit.
Speaking with Coin desk on the effect of the ruling, Dick Lo stated:
“If the ruling is in Ripple’s favour, XRP could rally quickly to [68 cents] and then potentially to [93 cents] (Fibonacci retracement levels),”
He further added that whales in the market have been making a 50-cent derivative call on XRP which expires towards the end of the year.
Another reason why traders have decided to make XRP year-end upside calls is the upcoming cosmos announcement. ATOM has rallied early this month on the expectation that the cosmos will announce their interchain security during the Sept. 26 conference. This announcement will open doors for the token to capture value from the entire network and this will also lead to an appreciation in value.
According to a chart by Trading View, XRP’s chart has appeared to have flipped bullish existing its 10-month long bearish run.
For graders in the crypto space, this is a golden opportunity to leverage this early information and invest in the XRP token. It has been envisaged that there will be a significant increase in price at the end of the year. Getting in early will increase the chance of marking a good marginal profit from XRP.
It is important to know that the crypto market is always volatile and is not foolproof. Hence, traders should invest reasonably.