The XRP derivatives market has fallen to a multi-month low in open interest, deleveraging and creating cleaner conditions for a potential trend reversal.
The price of Ripple (XRP) has fallen consistently over the past month amid broader crypto weakness, falling more than 26% during the period. Another decline of almost 3% on Wednesday revived concerns that liquidation pressures 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 market demand to drive the price naturally, without over-indebted positions causing swings.
Market reset underway
XRP open interest (OI) on Binance has fallen sharply to $406 million, which happens to be the lowest level since November 2024. This decline is indicative of a large reduction in leveraged positions, likely caused by long liquidations or closing of positions by traders amid the recent price decline, according to CryptoQuant. said in his final analysis.
When the OI reaches such lows, the market becomes less vulnerable to volatility due to long or short pressures because much of the speculative debt has been eliminated. CryptoQuant revealed that this “reset” in the derivatives market often paves the way for a more stable trend.
Now that liquidation pressures have subsided, future price movements are less likely to be exaggerated by over-indebted positions. If spot market demand increases, supported by high on-chain activity, the price of XRP could recover more naturally. The analysis shows that this “clean slate” can create the conditions for a meaningful trend reversal, and that the derivatives market is now in a position to respond more calmly to new buying or selling pressure.
Complete reset phase
Similar signals arise 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 expected, a level that has historically preceded sharp price gains.
The analyst noted that while the downside momentum appears aggressive, the selling pressure does not appear to be driven by retail sales, but instead reflects distribution by large holders during liquidity cleanups. Egrag Crypto emphasized that this RSI behavior is not bearish, while describing it as a “full reset phase” after a previous RSI peak near 80.
You might also like:
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 washes out weaker hands, restores momentum and is followed by expansion. He said the structure would only turn bearish if the RSI fell below 43.
In terms of institutional interest, US-listed spot XRP ETFs attracted $19.46 million in inflows on February 3, according to SoSoValue. XRPZ Franklin XRP ETF refilled the chart showing $12.13 million in inflows, followed by the Bitwise fund with $4.8 million and Grayscale XRP Trust ETF with $2.51 million. By comparison, Bitcoin ETFs recorded net outflows of $272 million, while Ethereum ETFs attracted around $14 million, leaving XRP funds as relative outperformers.
SECRET PARTNERSHIP BONUS for CryptoPotato readers: Use this link to register and unlock $1,500 in exclusive BingX Exchange rewards (limited time offer).
#XRP #Open #Interest #Hits #Lowest #Level #November #Means #Traders