XRP Open Interest Hits Lowest Point Since November 2024: Binance Data Indicates Waning Liquidity

XRP is experiencing significant selling pressure as the overall cryptocurrency market grapples with uncertainty and decreased bullish sentiment. Recent data from Binance shows that the Open Interest (OI) for XRP has plummeted to its lowest level since November 2024, indicating a shift in trader behavior and a dry-up in speculative appetite. This decline reflects reduced market involvement, leading to concerns about future price sustainability.

Key Takeaways

XRP's Open Interest has fallen to its lowest level since November 2024, indicating reduced liquidity and trader participation.
A significant decrease in Open Interest from over $1.7 billion to nearly $504 million reflects a lack of conviction among traders.
Persistent negative funding rates suggest that short sellers dominate the market, heightening the risk of further downward movement in XRP's price.
XRP's price struggles below key resistance levels, with the need for a recovery above $2.40 to shift market sentiment.

Current Market Overview of XRP

XRP has come under considerable selling pressure as the broader cryptocurrency market faces uncertainty and risk aversion. Investors are feeling the weight of fear, causing liquidity conditions to tighten and adding strain to assets that were once strong.

Recent data from Binance, the leading cryptocurrency exchange by trading volume, shows a sharp decline in XRP Open Interest, which has dropped to the lowest level we’ve seen since November 2024. This indicates a notable change in how traders are positioned, as speculative interest wanes and leveraged positions are being reduced across the broader market.

According to the latest metrics on derivatives, XRP is entering a pivotal stage characterized by eroding sentiment and a consistent loss of momentum. The significant drop in Open Interest signals reduced participation from both long and short traders, indicating that the current market lacks the conviction necessary for a strong directional movement. This shift occurs as XRP had been trying to hold steady above crucial psychological levels, but persistent selling pressure has hindered a robust rebound.

A recent report from CryptoQuant, released via Arab Chain, highlights the worsening conditions of XRP derivatives, revealing increased stress across the cryptocurrency market. Open Interest on Binance has dramatically decreased from record levels exceeding $1.7 billion to approximately $504 million, and at one point, it even dipped to $473 million.

XRP Ledger Open Interest (Binance) | Source: CryptoQuant

This sharp decline indicates a significant liquidity outflow from both long and short positions, suggesting that traders lack the confidence needed to maintain a clear trend. The decrease in Open Interest corresponds to XRP's price drop to around $2, following recent trades between the $2.5 and $3 range. This relationship suggests that traders are hesitant to re-enter the market after being liquidated, leading to price movements governed by short-term trends instead of sustainable buying momentum.

Moreover, funding rates continue to highlight this weakness. Over the past two months, the funding rates have frequently turned negative, indicating that short sellers are prepared to pay to keep their positions. A negative funding rate generally reflects that selling pressure is surpassing buying demand, raising the likelihood of continued declines unless new liquidity enters the market.

In summary, the combination of falling Open Interest, ongoing negative funding, and declining price action presents a concerning picture of fragility. There are no clear signs of significant accumulation from major investors or institutions, and unless a change occurs in the behavior of derivatives, XRP remains firmly in the grip of sellers.

XRP Price Analysis: Weak Recovery Following Breakdown

XRP continues to be heavily pressured in the market, which is reflected in its chart showing a clear lack of bullish structure. After failing to maintain levels above $2.50–$2.70, the price sharply declined, recently touching lows near $1.90 before attempting a minor recovery.

XRP struggling to reclaim $2.2 level | Source: XRPUSDT chart on TradingView

The refusal to hold above the 50-day and 100-day moving averages indicates that sellers still have a firm grip on the market, as both of these moving averages are now trending downward—an indication of ongoing bearish momentum. Additionally, XRP remains below the 200-day moving average, reinforcing the overall negative outlook and signaling that long-term support has not yet returned.

Volume spikes during market sell-offs point to capitulation rather than accumulation, while the weaker volume observed during recent upward movements suggests a lack of strong conviction among traders. Each attempt to recover has encountered resistance, leading to lower highs and lower lows—a classic pattern indicative of bearish trends.

To improve market sentiment, XRP must reclaim the $2.40 level and remain above it; otherwise, the risk of revisiting $1.90 or even falling as low as $1.70 remains substantial.