XRP Chalks Out Fastest Rally Since January 2018 Boom, Eyes $4 Target

Payments-focussed cryptocurrency XRP, which failed to set new price highs during the 2020-21 bull run due to regulatory struggles, is chalking out its

Payments-focused cryptocurrency XRP (CRYPTO:XRP) - which failed to set new price highs during the 2020-21 bull run due to regulatory struggles - is chalking out its fastest ascent in years, with derivatives tied to the token seeing record activity.

The cryptocurrency’s price has surged 50% to seven-year highs above $3 this month, extending the past quarter's 240% rally, CoinDesk data shows. Prices are up 30% in the past seven days alone, lifting the market capitalization to $176.75 billion - the third-highest after stablecoin tether.

XRP is clocking its fastest rally since the altcoin boom of January 2018, a popular market analysis tool shows. The measure - called the relative strength index (RSI) - oscillates between 0 and 100, measuring the speed and change of price movement over specific periods (usually 14 days or 12 months).

A reading of 0-30 is considered oversold, while 70-100 is overbought. A neutral market is indicated by a reading of 50. Higher time frame RSIs are used to gauge the strength of a bull or bear market.

XRP's 14-month RSI has risen to 92 - its highest since October 2017, indicating that the momentum observed over the past 12 months is the strongest over seven years.

Rookie traders would quickly point out that RSI readings above 70 indicate overbought conditions and potential for a bull breather or correction. However, that's not necessarily the case, as RSI merely measures the speed of price changes over a specific period.

Indicators can continue to flash the so-called overbought reading longer than bears can stay solvent. As the law of motion states: An object in motion will remain in motion unless acted upon by an outside force.

"Crypto continues its recovery from Monday’s drop, with BTC pushing towards the $100k mark. The broader market is rebounding, with altcoins like XRP and XLM standing out. XRP has reclaimed the 3rd spot among cryptocurrencies and surpassed BlackRock’s market cap,” Diego Cardenas, OTC trader at digital asset platform Abra, told CoinDesk in a note on Thursday.

"This surge is driven by a growing number of partnerships, the launch of Ripple’s stablecoin RLUSD, and speculation about a potential spot XRP ETF," Cardenas added.

Currently, XRP-specific factors - combined with broader crypto market dynamics - are supporting the ongoing bullish momentum.

Take trading volumes, for instance. The spot market tally has tripled to over $23 billion in the past 24 hours, validating the price surge. Meanwhile, volumes in derivatives have more than doubled to $34 billion, according to data from Coingecko and Coinglass.

XRP's perpetual futures open interest has surged to a record high of 2.34 billion XRP, with funding rates - which represent the cost of holding leveraged bets - hovering around 13%.

That compares to an overheated 100% in early December, which signaled excess bullish leverage. In other words, the XRP market is clocking a much healthier bull setup that can sustain continued price gains.

Meanwhile, crypto market leader bitcoin rose past the $100,000 mark on Wednesday, as data showed a slowdown in the U.S. core inflation. Strength in bitcoin often translates into increased risk-taking in the broader crypto market.