XRP Price Surge Likely if SEC Approves Ripple ETF Tomorrow

Highlights

Odds that the SEC will approve a spot XRP ETF have jumped in the past few weeks.
One of the best trade ideas to consider is to use options to position yourself.
Options have lower risks than perpetual futures and spot trades.

XRP (Ripple) price has declined substantially after cryptocurrency markets descended across the board. Experts forecast an anticipated return of XRP value during this year when the Securities and Exchange Commission (SEC) allows the spot Ripple ETF to proceed. An SEC approval could elevate the XRP price value to $5. This article investigates appropriate trading methods for investment before a potential occurrence takes place.

XRP Price Could Rise if SEC Approves Ripple ETF

XRP, the third-biggest cryptocurrency, has seen increased demand from retail and institutional investors lately. One sign of this is the fact that it has had the most spot ETF applications this year, totaling 18. Wall Street companies like Bitwise, Grayscale, Canary, and Fidelity have all applied for these funds.

Odds of these ETFs have jumped in the past few months, moving from 59% in January to 85% today. These odds have remained elevated after the SEC ended its Ripple appeal this month.

Analysts expect the XRP price to explode higher in case of approval. One analyst hinted that the price of Ripple would jump to $5, while another one sees XRP hitting $8. These forecasts point to big swings ahead for a coin trading at $2.2.

Trade Idea for Ripple for the Ripple ETF Approval

Traders have several strategies to anticipate the potential XRP ETF approval. One of these approaches is just to go long the coin, and hope that the approval will push it much higher after the approval.

The risk with this approach is that the XRP price has formed a head and shoulders pattern on the daily chart. Its head is at around $3.40, while the shoulders and neck are at $3 and $1.94, respectively.

A H&S pattern is one of the most bearish patterns, meaning that a breakdown is possible, especially when it loses the support at $1.9447. This risk exists because it is unclear when the SEC will approve the XRP ETFs.

Another approach is to use long-dated call options to position for the XRP ETF approval. A call option is a trade that gives one a right, but not an obligation to buy an asset at a certain strike price. Consider the following scenario if you expect the Ripple price to hit $3.5 by June 27, when the approval will have happened.

Strike: $3.50
Ask price: $0.217
Delta: 0.32
Max Risk: $0.217
Max profit: Unlimited
Breakeven price at expiry: $3.717

In this case, your risk will be capped and have an unlimited profit potential, if you expect the coin to jump to $3.50.

Another approach is to buy a $4/$5 call spread, where you risk about $0.076 to potentially make $0.924, representing a 12x return if the coin closes at or above $5.

Summary

The upcoming XRP ETF approval may lead to a strong surge in the coming months, and the options market provides better scenarios. As this report demonstrates, the options market provides an ideal opportunity from a risk-reward perspective.

Frequently Asked Questions (FAQs)

1. Will the XRP price jump or fall if the SEC approves the Ripple ETF?

The odds are that the coin will jump if the SEC approves a Ripple ETF because of the potential demand from institutional investors.

2. Will the agency approve a spot XRP ETF?

The SEC is expected to approve a XRP ETF now that it was determined that it is not a security by a US judge.

3. What is the best trade idea to position for approval?

The best idea is to use options to position yourselves for the ETF approval in the coming months.

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crispus

Crispus is a seasoned Financial Analyst at CoinGape with over 12 years of experience. He focuses on Bitcoin and other altcoins, covering the intersection of news and analysis. His insights have been featured on renowned platforms such as BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com.

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