Ripple (XRP) Open Interest Crashes to 1-Year Low: Here’s What It Means

XRP traders have pulled back aggressively, driving Open Interest to one-year lows.

Several top crypto assets staged a minor recovery this week. The collective market cap jumped to over $3 trillion. Ripple (XRP), for one, surged by 8% today and briefly tapped $2.30.

But new data suggests that XRP remains under the control of sellers.

Ripple Out of Fuel?

A new analysis from CryptoQuant indicates that XRP is seeing a notable drop in market participation, and derivatives metrics on Binance have fallen to their lowest point since November 2024. Binance has recorded a sharp decline in XRP Open Interest from highs above $1.7 billion to about $504 million after briefly touching $473 million. This steep reduction is indicative of a significant outflow of liquidity from leveraged positions on both sides and points to fading conviction among traders.

The downturn in Open Interest has occurred alongside XRP briefly slipping below $2 during the weekend just before the latest rebound. CryptoQuant explained that the consistent drop in both price and Open Interest indicates that market participants are not reopening positions, which has resulted in an environment driven mainly by short-term trading rather than a structured buildup of demand.

Funding Rates further strengthen the bearish case. Over the past two months, funding has frequently turned negative, meaning short sellers have been paying to keep their positions open. This means that selling pressure remains dominant and that buyers are not stepping in with enough force to offset it.

When combining the patterns in Open Interest, Funding Rates, and price movement, the data points to a pronounced loss of momentum across the XRP market. Despite the crypto asset’s recent rebound to $2.23, the on-chain analytics platform said that there are no signs of meaningful accumulation from larger market players or institutional traders. If neither of the metrics improves, XRP continues to face strong selling pressure.

$2 or Risk Breakdown

Despite weakness in derivatives data, pseudonymous crypto analyst “CRYPTOWZRD” said that XRP looks strong after a solid bullish daily close and a jump in the XRP/BTC pair. They expect the price to keep rising. However, a small, temporary pullback would be normal and healthy, and could give traders better entry points before the next upward move.

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According to analyst Ali Martinez, XRP may be forming a bullish technical pattern called a right-angled ascending broadening wedge, which often points to the possibility of further gains. Despite this, he argued that this scenario only remains valid if the token can stay above the crucial $2 support level. If that floor fails to hold, the pattern could break down.