XRP's Recent Price Action Has Sparked Concerns in the Market

XRP's recent price action has sparked concerns in the market, with analysts suggesting the possibility of a re-test of lows around the $1.6 mark.

Recently, the price action of Ripple’s XRP has raised eyebrows among crypto analysts, especially with suggestions of a potential re-test of lows around the $1.6 mark.

Despite the cryptocurrency’s impressive order book depth, which showcases substantial trading interest, the market sentiment is still pivoting towards a cautious stance.

A Closer Look At XRP’s Options Market

A closer inspection of the options market unveils a significant preference for put options on XRP, over call options, at least according to data from Amberdata and Deribit.

This signals investor concerns about further price declines. Specifically, XRP’s put options have been trading at higher premiums than call options for several timeframes.

For instance, in the 15th of December maturity, both Amberdata and Deribit’s Deriscope report large biases in put options. Both institutions report a 0.64 skew for Amberdata and a 0.55 for Deribit.

In addition, a chart from Amberdata shows the 15th of December maturity with an Integration in OTM (Out-of-The-Money) puts at 0.52 and an Integration in OTM calls at 0.08.

This imbalance showcases a stronger interest in put options over call options, at least in that specific maturity. It is also important to note that the levels of OTM puts and calls are similar.

Chart of XRP's options market. Credit: Amberdata

This shift in sentiment may be attributed to traders preparing for a possible dip in XRP’s price, despite its strong order book depth and ongoing interest from both retail and institutional investors.

Furthermore, a glance at the total volume of put options versus call options tips the scales largely in favor of puts.

This is especially true for shorter-term maturities, which indicates a more immediate concern among traders over potential price declines.

The Count Down For A Spot XRP ETF Listing

Moreover, analysts have suggested that XRP could be next in line for a U.S. spot ETF listing. However, the options market seems to be presenting a more cautious view, with many investors hesitant to bet on immediate upside.

While the potential ETF listing would undoubtedly provide a boost to XRP’s institutional appeal, the current market sentiment—reflected by the options skew—indicates a more bearish short-term outlook.

As the cryptocurrency market navigates through an uncertain phase, all eyes are on the implications of price levels and options market trends.

The possibilities of an impending spot XRP ETF listing and its impact on market optimism are also critical factors that could influence the surprising direction of XRP’s price.

With its recent attempts at recovery met by resistance, the cryptocurrency is poised for an interesting turn in the coming days.