thecryptobasic.com
$XRP derivatives traders have gone through a major leverage reset in recent weeks.
Notably, long liquidations have surged 832% above the three-month average, while falling open interest and negative funding rates point to aggressive deleveraging rather than broad selling by long-term holders.
In other words, leveraged traders betting on higher prices have been forced out in recent weeks. However, stable spot exchange reserves suggest many $XRP holders are choosing to ride out the volatility instead of selling.
For context, $XRP’s price has dropped by more than 20% over the past three months. On a yearly basis, $XRP is down 53%.
$XRP Derivatives Undergo Major Reset
CryptoQuant data shows $XRP experienced a sharp wave of long liquidations over the past month. Nearly $3 million in leveraged long positions were wiped out during the latest decline. One liquidation event alone erased about $6.7 million in long positions, highlighting the scale of the sell-off.
At the same time, $XRP’s open interest dropped from roughly $1.18 billion to around $1.04 billion, an 11.1% decline over the month. Falling open interest alongside rising liquidations suggests traders are leaving the market rather than rotating into new positions.
Funding rates on Binance have also turned deeply negative. CryptoQuant said this represents a 463% shift from the quarterly baseline. Negative funding means short sellers are paying longs, showing bearish positioning has become dominant in perpetual futures markets.
Overall, the $XRP derivatives market data points to widespread long liquidations, with long positions being liquidated far more heavily than short positions.
Spot Investors Stay Calm
Meanwhile, spot investors have remained resilient. CryptoQuant noted that Binance’s $XRP spot reserves fell just 0.35% week over week. That suggests little $XRP has moved onto exchanges for immediate selling. Instead, tokens have been withdrawn from exchanges.
Stable exchange reserves contrast sharply with the heavy futures liquidations. This suggests long-term holders have largely avoided panic selling despite $XRP’s recent weakness.
This divergence between the derivatives and spot markets is healthier than a scenario in which leveraged traders and spot holders sell simultaneously.
Attention Turns to the Next Move
Historically, major volatility has often followed deeply negative funding rates combined with exhausted long liquidations. Once excessive leverage has been flushed out, the market is in a better position for its next move. The focus now is on whether open interest begins to recover.
CryptoQuant also pointed to Ripple’s recent RLUSD expansion into Japan through SBI VC Trade as a positive long-term development. However, it said near-term price action will continue to be driven primarily by derivatives activity.