XRP is navigating a crucial moment as it attempts to hold steady after falling below the $1.80 threshold and drifting toward the $1.60 area, searching for short-term support. This decline aligns with a general downturn in the cryptocurrency market, but XRP’s particular challenges indicate a deeper concern within its trading sphere. Recent findings from CryptoQuant highlight that there is a distinct contraction in XRP derivatives, pointing to a significant shift in how traders are behaving.
Recent data reveals that the open interest across major XRP derivatives platforms has decreased to approximately 902 million, marking a low not seen since 2024. This decline sharply contrasts the much higher levels experienced during 2025, which consistently ranged from 2.5 to 3.0 billion. This substantial decrease implies that traders are actively unwinding leverage, rather than just shifting positions between exchanges, illustrating a broader trend toward risk aversion.
Declines like this often suggest that the market is reducing risk following prolonged periods of volatility. With fewer leveraged positions on the table, price fluctuations become more measured, allowing traders to step back and reassess the environment. As XRP approaches the $1.60 support level, many analysts are keenly observing if this reduction in leverage sets the stage for a period of stabilization or hints at further declines ahead.
Leverage Reduction Indicates Possible Base Formation
A recent report provides valuable insights by detailing where this significant decrease in leverage is occurring. For instance, on Binance, XRP derivatives open interest has shrunk to around 458 million. This figure is still above the lows seen last December, yet represents a sharp decline compared to earlier highs.
This downturn on Binance mirrors similar trends across various other trading platforms, reinforcing the notion that this is a widespread deleveraging rather than a simple reallocation of trades.
From a structural perspective, this situation is crucial. When open interest declines concurrently across many platforms, it often indicates that traders are actively lowering risk by closing leveraged positions. Such conditions frequently signal a shift towards price consolidation, as the market begins to process prior volatility and seeks a new balance. Historically, these periods have often led to the establishment of solid base structures, especially as selling pressure diminishes and volatility decreases.
Moving forward, experts emphasize that monitoring any recovery in open interest will be vital. An uptick in leverage, particularly if aligned with favorable price momentum, could indicate the emergence of a new trend.
Currently, however, the reduction in open interest, reaching its lowest point since 2024, underscores a clear market recalibration. While this adjustment might seem subdued at first glance, it could lay a stronger groundwork for future price movements, provided that effective risk management is prioritized in the next chapter of XRP’s market narrative.
XRP Price Demonstrating Signs of Weakness
Price action for XRP continues to showcase inherent weaknesses, trading consistently below pivotal moving averages and testing crucial support around the $1.60 mark. The charts illustrate a noticeable shift from a previous uptrend into a persistent downtrend, characterized by a succession of lower highs and lower lows since reaching peaks of around $3.50–$3.60 in October. The momentum has been steadily declining, with each attempted recovery faltering beneath the falling short- and medium-term moving averages, indicating ongoing seller dominance.
The breach of the $1.80 support level is technically significant. This zone previously served as a key demand area, and the decisive breakdown indicates a lack of aggressive buying interest from traders. XRP now trades below both the 50-day and 100-day moving averages, while the 200-day moving average remains on a downward trajectory, solidifying a bearish outlook for the medium term.
Trading volume stays relatively low compared to past distribution periods, aligning with the derivatives data that points to an ongoing reduction in leverage rather than panic selling. This reinforces the perspective that the current trend reflects a controlled unwinding rather than a capitulation phase.
Should the price maintain support around the $1.55–$1.60 level, XRP may manage to stabilize and initiate a base formation. However, failing to hold this critical area could result in further declines toward earlier demand zones around the $1.30–$1.40 ranges.
Image courtesy by ChatGPT, chart data sourced from TradingView.com
