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XRP’s 60% Weekly Gain Defies Broader Crypto Slump as Bitcoin Stalls Below $30K
Crypto index funds potentially adding XRP to their holdings could mean additional buying pressure for the token, one analyst said.
Updated Jul 18, 2023, 9:48 p.m. Published Jul 18, 2023, 9:48 p.m.
Ripple’s XRP outperformed most cryptocurrencies Tuesday as the initial market-wide rally following last Thursday’s lawsuit ruling has seemingly fizzled out.
The native token of the Ripple payment system was the best performer among the top 25 crypto assets over the last 24 hours, gaining 3.6%. XRP retook its place as the fourth largest digital asset by market value, toppling the embattled exchange giant Binance’s BNB token.
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Bitcoin (BTC) and ether (ETH), the two largest crypto assets by market capitalization, are now each lower than their levels from last Thursday, both stuck below their psychologically important price levels at $30,000 and $1,900.
Read more: Are Bitcoin Miner Sales Preventing Breakout to Higher Prices?
“The Ripple vs. SEC lawsuit did not generate a broader lasting rally in crypto,” David Lawant, head of research at institutional crypto exchange FalconX.
Though it’s given back some of last Thursday's gains, XRP was still up roughly 60% since the ruling. The CoinDesk Crypto Market Index (CMI), which tracks the performance of the broader digital asset market, meanwhile, gave up all of its Thursday advance, declining 0.5% over the same period.
Top altcoins such as Polygon’s MATIC, Solana’s SOL and Cardano’s ADA, which enjoyed sizable rallies last Thursday, completely reversed to the levels where they traded prior to the XRP ruling. MATIC and SOL are now down 5% over the week, while ADA dropped 2%.
While the rush to purchase XRP could well be mostly behind us, Lawant said, digital asset funds adding the token to their holdings could represent some buying pressure boosting its price.
“Index funds are one potential source of additional institutional flow I’m still watching,” he said.
“XRP has a market capitalization of more than 3.5x of ADA and SOL, typically the largest constituents outside of BTC and ETH, with a weight of little over 1%,” said Lawant. “If XRP is included in the underlying indexes, the asset could represent 4-5% of the composition of the top broad crypto indexes.”
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Solana CME Futures Fell Short of BTC and ETH Debuts, but There's a Catch
When adjusted for asset market capitalization SOL's relative futures volume looks better, K33 Research noted.
What to know:
- Solana's SOL futures began trading on the Chicago Mercantile Exchange (CME) on Monday, with a notional daily volume of $12.3 million and $7.8 million in open interest, significantly lower than the debuts of bitcoin (BTC) and ether (ETH) futures.
- Despite the seemingly lackluster debut, when adjusted to market value, SOL's first-day figures are more in line with BTC's and ETH's, according to K33 Research.
- Despite the bearish market conditions, the launch of CME SOL futures offers new ways for institutions to manage their exposure to the token, said Joshua Lim of FalconX.
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