XRP is trading close to $1.30 after gaining around 1%, while activity in the derivatives market has declined significantly. Open interest has fallen from $1.128 billion in August to $871.22 million, a drop of more than $250 million in less than four weeks.
The combination of a relatively steady spot price and a shrinking futures market raises the question of whether bullish conviction is fading or traders are simply reducing leverage while spot demand remains intact.
Falling Open Interest Does Not Necessarily Mean XRP Is Turning Bearish
A decline in open interest can occur when traders close futures positions, are liquidated or adjust their exposure ahead of a potential price move. In XRP’s case, the decline alone does not confirm a bearish trend. It may indicate that traders are scaling back leverage without taking a firm view on the next direction.
Exchange-level data shows that the reduction has been widespread. Binance open interest dropped from $558 million to $423 million, while Bybit fell from $379 million to $291 million during the same period. The declines across multiple major exchanges suggest a broader reduction in futures exposure rather than an isolated exchange event.
Funding and positioning data also provide a reason to avoid interpreting the move as capitulation. Binance’s open-interest-weighted funding rate remains positive, indicating that long positions continue to exceed shorts across active contracts. The aggregate 24-hour long/short ratio is 0.9904, close to neutral, although larger traders remain positioned more heavily on the long side.
Data from Binance and OKX shows account-level traders leaning long by approximately 2.5 to 3 times. Binance’s top traders are also net long when measured by both the number of accounts and position size.
Liquidations totaled $9.67 million over the previous 24 hours. Long liquidations accounted for $4.87 million, while short liquidations reached $4.80 million. The relatively even split suggests there has not been a broad, one-sided liquidation event.
The shorter 12-hour period produced a different result. Long liquidations reached $500.96K compared with $148.49K for shorts, coinciding with the price weakness that came before XRP’s latest rebound. The short-term imbalance is relevant, but the 24-hour figures point to a much more balanced liquidation environment.
ETF flows provide another indication that spot demand has not disappeared. XRP ETFs recorded $3.5 million of inflows on September 16 through Franklin Templeton’s XRPZ fund, extending the inflow streak to 10 days despite XRP falling during that session.
The contrast with larger crypto assets was notable. Bitcoin ETFs registered $295 million in outflows, while Ethereum ETFs saw $224 million leave during the same period. XRP was therefore among the crypto ETF categories continuing to attract net inflows.
Earlier data from September also shows that derivatives positioning has shifted rapidly. A September 7 report found Binance’s funding rate had briefly turned negative following heavy liquidations before returning to positive territory.
CryptoQuant contributor Amr Taha also highlighted an “unusual structure” around the same period, when rising open interest occurred alongside persistently negative perpetual CVD. The observation illustrates that open interest and taker-side flows do not always move together.
The latest decline in XRP open interest therefore follows several changes in leverage throughout September rather than representing a standalone market event.
$1.29 Remains a Key XRP Support Level
XRP is trading around the middle of an 8-hour parallel channel, with descending resistance and support lines defining the range over recent weeks.
The weekly chart places this range around two significant exponential moving averages. The 50-week EMA is near $1.52 and represents resistance, while the 20-week EMA is around $1.29 and acts as support.
A daily or weekly close below $1.29 would push XRP beneath both the 20-week EMA and a Fibonacci confluence zone. That could bring the psychologically important $1 level back into focus.
Conversely, a move above $1.40 would clear the descending channel resistance and potentially expose the $1.60–$1.70 area, which sits closer to the 50-week EMA.
The $1.29–$1.40 range is therefore likely to remain important as traders assess whether XRP’s recent leverage reduction is simply a positioning reset or the beginning of a deeper market move.
