XRP Derivatives Market Hits One-Year Lows as Open Interest Plummets
Market analyst Crypto Convicted reports a sharp deterioration in XRP’s derivatives market, with open interest plunging from over $1.7 billion to roughly $504 million, its lowest level since November 2024.
Notably, this steep contraction signals fading trader conviction and a broad cooldown in speculative activity.
Open interest reflects the total value of active futures and perpetual contracts, making it a key gauge of market liquidity, participation, and sentiment. A steep drop in OI typically indicates traders are de-risking, closing both long and short positions as uncertainty rises.
For XRP, the decline shows liquidity draining from both sides of the market, signaling a broad pullback rather than a deliberate shift toward bullish or bearish positioning.
The drop in open interest coincides directly with XRP’s recent price slide. After holding the $2.5–$3 range, XRP recently dropped toward the psychological price of $2 even though it has dusted itself and reclaimed the $2.20 level.
Historically, rising OI reinforces strong price trends, while sharp contractions typically precede or confirm phases of consolidation and uncertainty. In this case, the steep pullback suggests traders are retreating as volatility cools and market conviction weakens.
What’s next? Well, a sharp drop in open interest isn’t inherently bearish over the long term. Deep leverage flush-outs often create healthier market conditions by reducing liquidation risk and paving the way for more organic price discovery.
For XRP, this reset could ultimately position the asset for a stronger, more sustainable recovery once sentiment stabilizes and fresh demand returns.
XRP Eyes a Major Trend Reversal as Analysts Highlight a Textbook “Cup” Formation
Crypto trader Kamran Asghar notes that XRP is carving out a textbook bullish reversal, forming a classic cup-shaped pattern after months of consolidation. This structure, known for preceding powerful breakouts, suggests the asset may be primed for an explosive upside move once confirmed.
The $2.30 neckline sits at the heart of this setup, repeatedly capping XRP’s upward moves. According to Asghar, the market shows a steady recovery, with rising lows and tightening volatility, often a sign of hidden accumulation building momentum even amid muted price action.
The cup formation illustrates a cycle of decline, stabilization, and gradual recovery. For XRP, it shows buyers steadily absorbing sell pressure, driving the market toward a key inflection point. The rounded bottom, a hallmark of this pattern, signals waning bearish momentum and the resurgence of buying interest.
What’s next? Well, a decisive break above XRP’s $2.30 neckline would confirm the cup pattern, potentially sparking a strong bullish surge.
Historically, confirmed cup breakouts in crypto often drive rapid price expansions, fueled by technical momentum, short liquidations, and renewed speculative inflows.
If XRP breaks through decisively, Asghar notes of a potentially explosive rally that could reshape its medium-term trajectory and reignite bullish momentum.
Conclusion
XRP’s plunging open interest signals a market in reset, leverage has unwound, speculation has cooled, and traders await clear direction. While confidence is subdued, the contraction clears excess froth, setting the stage for a healthier rebound.
Meanwhile, XRP is shaping a classic cup pattern and nearing the $2.30 neckline, which is a pivotal point. A confirmed breakout here could trigger strong upside momentum, drawing renewed trader interest and highlighting XRP’s growing prominence in the crypto market.
