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Analysis
18 Jul 2023

XRP bonanza after partial victory

After a lengthy legal battle between the SEC and Ripple, the case progressed this week, with XRP receiving a partial victory leading to a massive XRP rally.
XRP volume
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After a lengthy legal battle between the SEC and Ripple, the case progressed this week, with XRP receiving a partial victory leading to a massive XRP rally. The SEC sued Ripple over issuing an unlicensed security in December 2020, limiting the previous retail darling XRP’s performance during the 2021 bull market. The partial victory caused a massively strengthened sentiment in XRP and led to Coinbase and Gemini relisting the token after a 2.5-year-long hiatus. XRP saw a massive daily gain of xx% as the partial victory was announced as volumes skyrocketed alongside XRP, briefly becoming the fourth largest cryptocurrency measured by market capitalization, surpassing BNB. Amidst the massive buoyancy in XRP, XRP volumes surpassed BTC volumes in Binance’s USDT pairs, while XRP saw a daily trade volume of $2.5 billion in South Korea. Ripple’s partial victory could have spill-over effects on the rest of the market, particularly tokens impacted by the SEC lawsuits against Coinbase and Binance, and could re-attract retail traders to the market, leading some to prepare for an altcoin resurgence.
Massive XRP exuberance
dominance
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The extreme gains of XRP had spill-over effects on coins in the days following the announcement. On July 12, ahead of the announcement, BTC’s market cap dominance sat at 51.5%, while XRPs dominance sat at a meager 2.16%. After the announcement on July 13, XRP’s market cap dominance increased by 1.36%, reaching 3.52%, whereas BTC’s dominance declined by 1.34%, to 50.14%, as the rally initially was heavily concentrated to XRP. XRP saw its notional OI climb by 21% in the four hours following the announcement while funding rates soared above neutral levels. OI stays elevated compared to July 12 levels, potentially making XRP vulnerable to short-term squeezes of overleveraged longs.
OI
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In the following days, XRP traded at massive volatility and saw its dominance decline by 0.3 pp, while BTC’s dominance remained stable as other coins, such as SOL, experienced strong rallies.
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