Traders Cut Leveraged Bets on XRP as Futures Open Interest Collapses
XRP traders have sharply reduced leveraged exposure since July 2025. CryptoQuant shows Binance Estimated Leverage Ratio (ELR) for XRP fell from ~0.59 in July to ~0.187 (lowest since Nov 2024), signalling large-scale position closures or forced liquidations. Coinglass reports exchange futures open interest contracted from about $10.94 billion (~$3.65 ATH period) to roughly $3.47 billion (≈1.81 billion XRP), a ~68% drop. Data suggest traders are deleveraging by closing longs rather than flipping into shorts, which lowers immediate liquidation cascade risk but removes a key source of bullish momentum. Spot XRP ETF inflows continue to provide some demand support, but the derivatives market de-risking implies weaker near-term upside and reduced volatility. Traders should watch for signs of a directional shift: rising open interest, stabilization of ELR, or a higher low on the daily chart — until then thin liquidity and low leverage leave XRP vulnerable to further downside or sudden large moves when activity returns. Keywords: XRP, leverage ratio, futures open interest, ELR, Binance, CryptoQuant, Coinglass, spot ETF, volatility.
Bearish
The collapse in estimated leverage ratio and a roughly 68% fall in futures open interest point to a broad deleveraging among XRP traders. When leverage is washed out and open interest falls, upward momentum driven by derivatives (liquidations and leveraged buying) weakens, reducing near-term bullish catalysts. Continued spot ETF inflows provide partial demand support, but they appear insufficient to offset the loss of speculative derivatives activity. Short-term impact: higher probability of continued sideways-to-down price action and lower volatility, with the risk of sudden large moves when liquidity returns. Long-term impact: if derivatives demand recovers (rising open interest and ELR stabilization) and on-chain/ETF inflows persist, the bullish case could re-emerge; until then, downside risk dominates.