XRP trading could get spicy after CPI report as futures bets hit highest since October
This is an excerpt from CoinDesk newsletter 'Daybook.'
Sign up here, if you haven't already. Wednesday’s big story is XRP (XRP), the payments-focused cryptocurrency.
Not only did a bridge linking to the XRP Ledger experience an exploit early today, but the token price also hovers near a level that, if breached, could embolden bears. That level is $1. Prices briefly fell to 99 cents on some exchanges on Tuesday and, while they quickly recovered, the bounce looked to have stalled near $1.02. XRP has lagged behind bitcoin and the broader market recovery in recent days.
What’s more, open interest in XRP futures has risen to 2.67 billion XRP ($2.73 billion), the most since October, from 2.25 billion XRP at the start of the month. This buildup of leverage while XRP trades at this price points to potential volatility. That means XRP is more vulnerable than other major cryptocurrencies such as bitcoin BTC$64,148.66, ether ETH$1,910.89 and solana (SOL) to the U.S.
CPI release later today. A hotter-than-forecast reading would strengthen bets on Fed interest-rate increases and drive already-buoyant Treasury yields higher, creating headwinds for risk assets. Forecasts point to 0.1% month-on-month growth in the headline CPI for July, up from June’s –0.4% reading.
The year-on-year figure is expected at 3.4%, down from 3.5%, and annual core CPI inflation is seen dropping to 2.5% from 2.6%. According to ING, a softer-than-expected print could weaken the dollar, an outcome that could bode well for the crypto market. In bitcoin’s case, traders are hoping the report will push the price out of its recent trading range of $62,000 to $66,000.
However, the way BTC options are currently priced suggests low expectations for CPI-driven fireworks. Markus Thielen, founder of 10x Research, said the market is pricing a post-CPI swing of just 1.3%, which is nothing out of the ordinary.
Data tracking website Laevitas made a similar observation: “7d ATM IV [implied volatility] has compressed to 29.1v on BTC and 41.2v on ETH even as a binary July print lands inside the weekly window, so the term structure is declining to price the event risk that sits directly on the tape,” Laevitas said on X.
The fact that expectations remain low could be just the setup for markets to be surprised into action by a potential big beat or miss in the inflation figures. Stay alert! Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."
What’s trending One overlooked group has added $1.78 billion of selling pressure to bitcoin market (CoinDesk): Bitcoin’s 27% price slide this year isn’t just about ETFs and digital asset treasuries. Public miners have been an under-recognized supply source hitting the market right at the margin.
XRP bridge drained for $200,000 after software mistook fake deposits for real ones (CoinDesk): An XRP bridge lost nearly 200,000 XRP, worth about $200,000 at current prices, after a software flaw let an attacker claim deposits that were never made, then withdraw real tokens against the fake balances. Here's what bitcoin and ether traders are doing ahead of the binary U.S.
CPI print (CoinDesk): If the July U.S. consumer price index is higher than expected, the Federal Reserve could go for a rate hike in September. Traders are positioning in different ways ahead of the data release. Some are buying upside exposure. Others are focusing on higher volatility.
Today’s signal The chart shows XRP’s weekly price swings in candlestick format since 2023. The token’s price peaked above $3.50 in July last year and has been declining ever since. It is now hovering close to $1. A drop under this level would be the first since November 2024, when Donald Trump won the presidential election.
In that case, the July 2023 high of 92 cents, where buyers ran out of steam, could now act as support on the way lower. If that level gives way, the next potential support is seen directly at around 50 cents. Disclosure & Polices: CoinDesk is an award-winning media outlet that covers the cryptocurrency industry.
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