XRP (XRP) is trading just above a level heavily targeted by derivatives traders, making it a critical zone for short-term price action.
The payments-focused cryptocurrency changed hands at around $1.50 at press time, placing it just above a notable concentration of options activity at $1.40 on crypto exchange Deribit. XRP is used by Ripple to facilitate cross-border transactions.
Options are derivative contracts whose value is derived from an underlying asset, in this case XRP. They give traders the right, but not the obligation, to buy or sell XRP at a certain price (known as the strike) before a set expiration date. Call options are typically used to bet on the upside, while put options are used to hedge or speculate on the downside.
At the time of writing, $6.95 million worth of call option positions were open at the $1.40 strike, along with $7.69 million in put positions at the same level. In total, that brings the value of outstanding or “open” contracts at this strike to about $14.6 million, or nearly 25% of all XRP options open on the exchange. Most of this open interest was concentrated in the March 27 expiration.
CoinDesk contacted Deribit for comment on the same.
This type of clustering on a single strike is unusual and typically signals that the market is approaching an important turning point.
As the expiration approaches, this level can act as a magnet or gravitational price zone. Market makers and traders who sold options at $1.40 and are “short gamma” could dynamically hedge their exposure, potentially pulling the price toward the strike. This phenomenon is commonly referred to as “pinning”.
This concept is common in forex markets, where major currency pairs like EUR/USD often head for big strikes as expiration approaches.
Traders therefore need to watch the $1.40 level closely in the coming days. A sustained move above that could leave much of the open interest on the put side to expire worthless, while a drop below it could trigger hedging flows that intensify selling pressure.
Regardless, the large concentration of opportunities at this strike suggests that XRP’s near-term price action could be heavily influenced by how this open interest settles or settles.
