XRP Open Interest Plunges To 2024 Lows: 902M Fall Reveals Leverage Mirage

XRP navigates a precarious market phase, as structural stress intensifies beyond immediate price action.

XRP's Leverage Mirage Pops: What This Deleveraging Really Means for Your Portfolio in 2025

🚩 The Leverage Game Shifts for XRP: A Reckoning in Derivatives

XRP is navigating treacherous waters, having broken below the critical $1.80 level and now struggling to hold onto the $1.60 zone. While broader market jitters are undoubtedly playing a part, the real story here is the structural stress point emerging within XRP's derivatives market.

XRP Price Trend Last 7 Days

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This isn't just about spot price action; it's about the very foundation of speculative interest crumbling. A recent report from CryptoQuant reveals a brutal unwinding of leverage, signaling a profound shift in trader psychology.

XRP's dramatic open interest drop reflects a significant shift in market equilibrium.

💥 Let's be clear: open interest across all XRP derivatives platforms has crashed to roughly 902 million. This marks its lowest point since 2024. Compare that to earlier in 2025, when open interest consistently hovered between a dizzying 2.5 billion and 3.0 billion.

This isn't merely positions shifting exchanges; this is a full-scale retreat from risk. It’s a systemic cleansing of over-leveraged bets, and anyone caught on the wrong side is feeling the pain.

📍 Deeper Dive: The Unwinding of Speculation

When leverage contracts this sharply, it’s rarely a gentle affair. It signifies a market de-risking in earnest, usually after a period of extended volatility or irrational exuberance. The speculative froth is being purged.

With fewer desperate leveraged positions driving sudden price swings, future movements tend to become slower and more deliberate. The market needs to find a genuine equilibrium, not one propped up by borrowed capital.

As XRP claws at the $1.60 support, the critical question isn't just "where next?" but "is this leverage reset finally laying the groundwork for a more sustainable base, or is there still deeper pain to endure?" As a seasoned observer, I lean towards the latter initially, followed by eventual stabilization.

Market Impact Analysis: The Harsh Reality for Price & Sentiment

🔶 The report underscores the pervasive nature of this deleveraging, highlighting that the decline isn't confined to a single platform. Binance, a dominant player, saw its XRP derivatives open interest fall to around 458 million. While still above last December's lows, it's a stark reduction from recent highs.

The dramatic 902 million decline in XRP open interest reflects a broader risk-off adjustment.

This widespread contraction across major trading venues confirms a broad risk-off adjustment, not a simple migration of positions. This matters immensely for market structure.

When open interest deflates simultaneously across the board, it reflects traders actively reducing risk and closing leveraged exposure en masse. Historically, such phases often precede prolonged periods of price consolidation.

The market needs time to digest the prior volatility and search for a new, honest price discovery. In previous cycles, these painful periods of deleveraging have been the crucible for forming new, solid base structures, especially once the persistent selling pressure finally wanes and volatility compresses to healthier levels.

Looking ahead, any meaningful recovery in open interest will be a key signal. A rebound in leverage, if it coincides with genuine improving price momentum and not just another speculative surge, could indeed signal the development of a new, healthier trend.

For now, however, the plunge in open interest to 2024 lows is a clear market cleanup operation. On the surface, it might seem quiet, but beneath, it’s a brutal recalibration that can, eventually, provide a much healthier foundation for future price movements. Provided, of course, that investors remember risk management isn't just a buzzword.

XRP Price Showing Weakness: A Technical Perspective

The price action for XRP mirrors this structural weakness perfectly. The asset trades decisively below its key moving averages, clinging precariously to the $1.60 support zone.

The chart paints a clear picture: a transition from an earlier uptrend to a sustained downtrend, characterized by lower highs and lower lows since the October peak near $3.50–$3.60. Momentum has vanished, with every attempt at a rebound failing miserably below declining short- and medium-term moving averages.

Analysts observe if XRP's leverage reset lays a groundwork for stabilization or signals further decline.

💔 The loss of the $1.80 level was technically significant. It was a prior consolidation base, a demand area that buyers failed to defend. This suggests a notable absence of aggressive buying interest. XRP is now comfortably below the 50-day and 100-day moving averages, with the 200-day still sloping downward, reinforcing a profoundly bearish medium-term structure.

📏 Crucially, trading volume remains muted compared to earlier distribution phases. This aligns with the derivatives data: we're witnessing a controlled unwind of leverage, not a panic-driven capitulation. This nuance is vital – it implies less "forced selling" from liquidations, but also a lack of conviction from new buyers.

If the $1.55–$1.60 region holds, XRP might attempt to stabilize and form a base. However, a decisive break below this area would expose the market to deeper retracement toward prior demand zones around $1.30–$1.40. Investors should be prepared for this contingency.

📍 ⚖️ Stakeholder Analysis & Historical Parallel: The Ghosts of Leverage Past

This isn't the first time the crypto market has engaged in such a brutal deleveraging. Anyone with more than a couple of cycles under their belt knows this script by heart. The most fitting recent parallel, in my view, is the broad market deleveraging that followed the FTX Collapse in November 2022.

The outcome then was catastrophic for many. FTX’s implosion triggered a massive, market-wide "risk-off" event. Billions were wiped from balance sheets, not just from the exchange’s direct victims but from countless leveraged positions across all platforms that suddenly found themselves without collateral or with cascading liquidations.

📉 The lesson learned was stark: excess leverage, especially when concentrated or reliant on fragile ecosystems, will always be purged. The 'smart money' often sees these storms brewing, or at least positions itself to capitalize on the aftermath. Retail investors, lured by the promise of outsized gains, typically bear the brunt of the pain.

Today's XRP situation, while not triggered by an exchange collapse, mirrors the mechanics of that 2022 event in its leverage unwinding. We see a similar contraction of open interest across platforms, signaling a broad reduction in speculative exposure. The difference, perhaps, is the catalyst: 2022 was an external shock, while this XRP deleveraging appears more organic, a consequence of over-extension and perhaps ongoing regulatory uncertainty specifically for XRP. However, the cleansing effect is identical: wash out the weak, consolidate power, and prepare for the next cycle.

The current deleveraging in XRP may set the stage for a critical base-building phase.

🔑 Key Takeaways

• XRP's open interest has plummeted to its lowest point since 2024, signaling a broad and aggressive deleveraging across derivatives markets.
• This significant unwind indicates a systemic "risk-off" adjustment, rather than mere position rotation between exchanges, suggesting a market cleansing is underway.
• The historical parallel with the November 2022 FTX collapse highlights how such leverage purges, while painful, can reset market foundations for future, more sustainable growth.
• XRP's price continues to show structural weakness, trading below key moving averages and testing the $1.60 support, making this a critical juncture for potential base formation or deeper retracement.
• Future recovery in open interest, coupled with genuine price momentum, will be crucial indicators for investors looking for signs of a new trend developing.

🔮 Thoughts & Predictions

The current XRP deleveraging is a classic market reset. Just as we saw after the 2022 FTX collapse, when the excess speculative capital was brutally purged, this contraction is a necessary, albeit painful, precursor to any sustainable rally. Big players don't want to buy into a market saturated with flimsy leverage; they want clear entry points after retail has been shaken out.

From my perspective, the key factor moving forward will be how long it takes for genuine demand to emerge once the dust settles. If the $1.60 support cracks, we're likely heading towards the $1.30–$1.40 range, where some serious accumulation could begin. However, a prolonged consolidation phase, potentially spanning several weeks, is more probable than a V-shaped recovery.

The lesson from 2022 is that once leverage is gone, the market can breathe and build a healthier foundation. While XRP faces its unique regulatory headwinds, the mechanics of deleveraging are universal. Patient investors could find long-term value in XRP once this cleansing phase completes, potentially leading to a renewed uptrend in late 2025 or early 2026 if broader market conditions stabilize.

🎯 Investor Action Tips

• Monitor the $1.55-$1.60 Support: A decisive break below this range could signal a move towards $1.30-$1.40; set stop-loss orders accordingly if holding XRP.
• Watch Open Interest for Rebound: A sustained, genuine increase in open interest, coupled with rising spot price, would be an early indicator of renewed investor confidence and a potential trend reversal.
• Prioritize Risk Management: With volatility likely to remain elevated, avoid over-leveraging and maintain conservative position sizing in your portfolio.
• Consider Long-Term Accumulation: For those with a long-term view, periods of deleveraging and price consolidation often present opportunities to accumulate assets at potentially undervalued prices.

📘 Glossary for Serious Investors

⚖️ Open Interest (OI): The total number of outstanding derivatives contracts (futures, options) that have not been settled. High OI suggests significant leverage and speculative activity, while a sharp drop indicates deleveraging.

⚖️ Deleveraging: The process by which individuals or firms reduce their debt or leveraged positions. In crypto, it typically involves closing out highly speculative, borrowed positions, often triggered by price drops or margin calls.

🧭 Context of the Day

XRP's dramatic deleveraging signals a brutal market reset, purging speculative excess to forge a healthier, albeit potentially lower, foundation for future price action.

Stakeholder	Position/Key Detail
💰 XRP Derivatives Market	Open Interest plunged to 902M (2024 low) from 2.5-3.0B (2025 highs), revealing major leverage unwinding.
Binance (XRP Derivatives)	📉 Open Interest dropped to 458M, mirroring broad market deleveraging across major trading venues.
Leveraged Traders	🌍 Actively reducing risk and closing out speculative exposure, driving the significant market contraction.
XRP Spot Price	🔴 Showing structural weakness, testing $1.60 support after losing $1.80, confirming a bearish medium-term outlook.

📈 RIPPLE Market Trend Last 7 Days

Date	Price (USD)	7D Change
1/29/2026	$1.91	+0.00%
1/30/2026	$1.81	-5.36%
1/31/2026	$1.73	-9.15%
2/1/2026	$1.64	-13.82%
2/2/2026	$1.59	-16.40%
2/3/2026	$1.62	-15.03%
2/4/2026	$1.59	-16.57%

Data provided by CoinGecko Integration.

💬 Investment Wisdom

"The market is a pendulum, swinging between unsustainable optimism and unwarranted pessimism."
— Benjamin Graham

Crypto Market Pulse

February 4, 2026, 05:10 UTC

Total Market Cap

$2.66 T ▼ -2.05% (24h)

Bitcoin Dominance (BTC)

57.34%

Ethereum Dominance (ETH)

10.29%

Total 24h Volume

$186.00 B

Data from CoinGecko

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