XRP traders are hedging their bets, wagering that the conflict in the Middle East will push prices down further.
Over the past 24 hours, investors on derivatives exchange Deribit have piled into bets that the Ripple-linked cryptocurrency will fall about 5% as tension between Iran and Israel is rattling markets.
While oil prices have skyrocketed, shipping insurers have raised prices, and the S&P 500 has fallen. Crypto wasn’t spared. Share prices for Coinbase, Strategy, and Circle all lost value.
XRP is down 1.1% in the past 24 hours, and trades at $2.15. The token has shed about 7% in the past week.
Bitcoin, Ethereum, and the broader crypto market have been bleeding over the past days as US President Donald Trump hinted at a potential US involvement in the conflict between Israel and Iran.
“The current dip in altcoin prices reflects a mix of macroeconomic uncertainty and market dynamics,” Vincent Liu, chief investment officer of crypto investment firm Kronos Research, told Bloomberg.
Options let traders lock in a future price for an asset like XRP. Calls are bullish, puts are bearish. Max pain is the price at which options become worthless, and “strike” refers to the price the trader is targeting.
On Polymarket, bettors give XRP’s price a 61% chance of falling to $2 before the end of the month.
Long term bulls
To be sure, options traders have placed about $92 million in bets, according to BasedMoney. About 70% of XRP are calls, or wagers that only pay out if the price goes up.
The most popular strike — the target price in an option bet — is $2.30, 6% up from its current price. That’s also where the max pain -point currently sits, or the level where most options become worthless.
Bets become more bullish over the long term.
About 20% of the calls on the September 26 strike are in bets that only pay out if XRP’s price breaks the $4.20 barrier — and hits a new all-time high in the process.
Looming ruling
Several factors outside of the conflict between Israel and Iran may affect XRP’s price.
Analysts say Ripple’s battle with the SEC has dampened XRP’s growth for years. However, that battle seems to be heading toward a final ruling.Traders are positioning for a favourable outcome.
The case centres on whether Ripple’s XRP sales broke securities laws — and a win could send the token soaring.
Ripple’s founders developed the cryptocurrency and the company now helps maintain the XRP ledger. The company uses XRP to facilitate international payments.
Then there’s the likelihood of an XRP exchange-traded fund.
Bettors on Polymarket are bullish that regulators will give the greenlight for a spot XRP ETF, with chances of approval in 2025 surging to 90%.
