XRP Open Interest Drops 70% as Negative Funding Tests $1.40 Bottom
XRP open interest has fallen 70%, dropping from about $660M to $203M, signaling a major leverage reset in XRP futures. The decline coincided with XRP price moving lower, which traders typically read as leveraged positions being liquidated rather than broad spot selling.
Funding rates turned deeply negative near the recent low around $1.40, indicating strong short-side demand and a futures market tilted toward lower prices. However, negative funding alone does not confirm a durable bottom. Traders now want evidence from price reaction and market structure.
Technical focus is on whether XRP forms a “double bottom.” The current zone is being treated as a critical test: XRP must hold support and then reclaim resistance for a recovery narrative to strengthen. If it fails to bounce, weakness could extend.
Separately, open interest is starting to rebuild while XRP price remains mostly stable, suggesting some leverage is returning after the liquidation shock. Analysts reference prior similar conditions during April 2025, but they caution that history does not guarantee the same outcome this time.
Key market takeaway for traders: XRP futures positioning has reset sharply (open interest -70%) while funding is still bearish (negative near $1.40). That combination increases the odds of volatility—either a rebound if the double-bottom confirms, or a continuation lower if support breaks.
Neutral
Neutral because the news contains both potential rebound signals and still-bearish positioning.
On the bullish-leaning side, XRP open interest fell 70% (from ~$660M to ~$203M) while price also dipped. When price and OI fall together, it often indicates leveraged longs/shorts are being liquidated and the “overcrowded” leverage is removed—conditions that have, in past cycles, sometimes preceded sharp recoveries.
On the bearish-leaning side, funding turned deeply negative near $1.40, meaning shorts were willing to pay to maintain bearish exposure. That typically signals downside pressure is still active and a bottom is not yet proven.
Market impact for traders:
- Short term: expect volatility. OI resets can produce quick rebounds, but bearish funding can also pull price lower if support fails.
- Medium term: confirmation matters. A double-bottom narrative requires XRP to hold the current support zone and reclaim resistance; otherwise, the liquidation “reset” may be followed by further deleveraging.
Overall, this is a setup-watch story for XRP rather than a confirmed trend change—hence neutral.