XRP open interest falls to $902M — lowest since 2024 as leverage unwinds
XRP derivatives open interest has dropped to roughly $902 million, the lowest level since 2024, as leveraged positions unwind across major exchanges. CryptoQuant-sourced data show open interest fell sharply from 2025 highs when it routinely exceeded $2.5–3.0 billion. Binance’s XRP contracts account for about $458 million of current open interest, and declines are broad-based rather than a transfer of leverage between platforms. Price has remained relatively stable despite the contraction in leveraged exposure. Analysts frame this as a leverage “clean-up” that typically reduces short-term volatility and can lead to consolidation or the building of a price base. Two scenarios are highlighted: (1) a balanced market if open interest stays low while price stabilizes, or (2) the start of a new trend if open interest rebounds alongside improving price momentum. For traders, the drop in open interest signals lower amplification of moves from liquidations and funding, favoring range-bound strategies and lower-risk position sizing until leverage returns or clear directional momentum appears.
Neutral
The drop in XRP open interest to $902M signals a broad deleveraging rather than a directional trader consensus. Historically, falling open interest during a leverage unwind reduces the likelihood of violent, short-term swings caused by liquidations and funding-rate spikes, which tends to produce lower volatility and consolidation rather than immediate strong rallies or crashes. This produces a neutral near-term outlook: bearish pressure from forced deleveraging is waning, but there is no clear replacement of speculative demand to drive a sustained upswing. Short-term implications: expect reduced volatility, fewer large liquidation-driven moves, and more range-bound trading — momentum traders may stay sidelined or reduce size. Longer-term implications: if open interest remains suppressed while price stabilizes, the market could form a stronger base that supports future appreciation; conversely, if open interest and funding return in tandem with rising prices, that could herald a new trend and amplify moves (bullish). Similar episodes in other crypto markets (e.g., Bitcoin and ETH during post-leverage cleanups) produced extended consolidation phases before eventual trend resumption when leverage and participation returned. Traders should monitor open interest, funding rates, exchange-level flows (notably Binance), and price momentum for signals to re-enter leveraged exposure.