XRP Whale Bets $224,500 on $1.4 Sideways Movement... What's the Outcome of the Short Strangle?

▲ XRP, Whale/AI Generated Image

An XRP whale has placed an option bet that the XRP price will not move significantly around $1.40 for the next month. However, the chart indicates the possibility of increased volatility as it enters the third test section of the uptrend line that has continued since the February low.

Benzinga reported on May 21 (local time) that a cryptocurrency whale made a $224,000 sideways market bet on Deribit with a short strangle strategy, simultaneously selling $1.40 call and put options expiring on June 26.

The trader sold 1.5 million contracts each of $1.40 call and put options, securing an upfront premium of $224,500. If XRP remains around $1.40 until expiration, the entire premium can be kept. Conversely, if XRP deviates significantly from $1.40, the position will enter a loss zone as the trader must compensate the option buyers for their losses.

The whale's bet focused on low volatility and maintaining a trading range. XRP has generally moved between $1.30 and $1.50 since February, and this trend supported the sideways market outlook. However, macroeconomic pressures and regulatory issues were presented as variables that could increase future price volatility.

Benzinga reported that inflation concerns are driving up global bond yields, putting pressure on stocks and cryptocurrencies. At the same time, the Senate Banking Committee passed the U.S. cryptocurrency market structure bill, which has now moved to a full Senate vote. Ripple's Chief Legal Officer, Stuart Alderoty, called the committee's decision a “monumental outcome that protects 67 million U.S. crypto holders.”

Ripple received conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) for the establishment of Ripple National Trust Bank. Benzinga reported that because Ripple is based in San Francisco, XRP is perceived as a U.S. crypto-related asset.

On the chart, XRP is moving along an uptrend line support zone that has held all lows since the February low of $1.11. The current zone is the third test of this trendline, and its defense based on closing prices is crucial. Trendline support is located in the $1.35 to $1.37 range.

Above, Exponential Moving Averages (EMAs) form a dense resistance zone. The 20-day EMA is at $1.4048, the 50-day EMA is at $1.4103, and the 100-day EMA is at $1.4811. All three EMAs show a downward slope, forming a structure that prevents recovery attempts. The Parabolic SAR is at $1.4983, confirming that the daily trend has turned bearish.

Since February, the $1.55 resistance level has repeatedly pushed back the XRP price, forming the upper boundary of the trading range. Benzinga analyzed that XRP must hold the $1.35 to $1.37 trendline support zone on a closing price basis. While the whale bet $224,500 on price stagnation, the chart shows that the compression between support and resistance lines is a structure preceding increased volatility.

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