XRP’s derivatives market has dropped to multi-month lows in open interest, clearing leverage, and setting up cleaner conditions for a possible trend reversal.
Ripple’s (XRP) price has been on a consistent decline over the past month amid broader crypto weakness, as it shed over 26% during the period. A fresh decline of almost 3% on Wednesday revived concerns that liquidation pressure from last weekend’s sharp sell-off may not be fully exhausted.
But new data suggests that the market reset following the liquidations could allow spot demand to drive the price naturally, without over-leveraged positions causing swings.
Market Reset Underway
XRP’s open interest (OI) on Binance has fallen sharply to $406 million, which happens to be its lowest level since November 2024. This decline is indicative of a major reduction in leveraged positions, likely caused by long liquidations or traders closing positions amid the recent price drop, CryptoQuant said in its latest analysis.
When OI reaches such lows, the market becomes less vulnerable to volatility from long or short squeezes, as much of the speculative leverage has been cleared. CryptoQuant revealed that this “reset” in the derivatives market often sets the stage for a more stable trend.
With forced liquidation pressure reduced, future price movements are less likely to be exaggerated by over-leveraged positions. If spot demand increases, supported by high on-chain activity, XRP’s price could recover more naturally. The analysis demonstrates that this “clean slate” may create conditions for a meaningful trend reversal, and the derivatives market is now positioned to respond more calmly to new buying or selling pressure.
Full Reset Phase
Similar signals are emerging from technical momentum indicators. Crypto analyst Egrag Crypto said XRP’s macro relative strength index (RSI) has fallen into the 45-50 zone faster than he expected, a level that has historically preceded sharp price bounces.
The analyst noted that while downside momentum appears aggressive, the selling pressure does not look retail-driven but instead reflects distribution by large holders during liquidity sweeps. Egrag Crypto stressed that this RSI behavior is not bearish, while describing it as a “full reset phase” following a prior RSI peak near 80.
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He added that the 45-50 range has acted as macro support in every previous XRP cycle and has never been broken. According to the analyst, this compression typically flushes out weaker hands, resets momentum, and is followed by expansion. He said the structure would only turn bearish if RSI falls below roughly 43.
In terms of institutional appetite, US-listed spot XRP ETFs attracted $19.46 million in inflows on February 3rd, according to SoSoValue. XRPZ Franklin XRP ETF topped the chart with $12.13 million in inflows, followed by Bitwise’s fund with $4.8 million and Grayscale XRP Trust ETF with $2.51 million. By comparison, Bitcoin ETFs recorded $272 million in net outflows, while Ethereum ETFs attracted about $14 million, leaving XRP funds as relative outperformers.
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