XRP is trading below the $2.00 mark as the market drifts into a phase defined 
by apathy and uncertainty, with participation thinning and conviction on both 
sides fading. After a powerful rally earlier in the cycle, price action has 
cooled significantly, and recent attempts to regain momentum have failed to 
attract sustained follow-through. The current environment reflects a market 
that is no longer driven by aggressive speculation but instead is weighed down 
by caution and a lack of clear directional catalysts. Related Reading: Bitcoin 
Breaks Below $87K As Political Risk Spikes – Liquidations Reveal The Real 
Driver Top analyst Darkfost explains that the shift began in the derivatives 
market. After XRP open interest on Binance surged to a new all-time high of 
$1.76 billion on July 17, positioning became increasingly crowded. As price 
stalled and volatility picked up, that leverage started to unwind. The result 
was a sharp contraction in open interest, which unfolded alongside a major 
price correction. XRP fell from $3.55 to $1.83, a drawdown of nearly 50%, 
highlighting how tightly price and leverage were linked during the 
distribution phase. Declining moving averages compress the price, signaling 
persistent downside pressure and weak momentum. Most recently, Binance XRP 
open interest dropped below $500 million, a level that has persisted since the 
exceptional liquidation event on October 10. This sustained compression 
signals a market that has largely flushed excess leverage, but has yet to see 
renewed speculative interest—leaving XRP stuck below $2 and searching for a 
new equilibrium. Deleveraging Resets Market Structure After Liquidity Flush 
Overall, XRP open interest has fallen by nearly 60%, signaling a significant 
destruction of liquidity in the derivatives market, particularly following the 
October 10 (10/10) liquidation event. This contraction reflects a broad 
unwinding of leveraged positions rather than a sudden collapse in spot demand. 
As positions were forced out or closed voluntarily, the derivatives layer 
thinned substantially, leaving the market far less crowded than during the 
mid-2025 peak. It is also important to recognize the mechanical effect of 
price on open interest. As XRP’s price dropped, the notional value of 
outstanding futures contracts fell alongside it, naturally amplifying the 
contraction in OI. In other words, part of the drop reflects lower prices 
reducing leverage in dollar terms, not just traders exiting positions. Still, 
the scale of the decline points to a genuine reset in speculative activity. 
Stepping back, these deleveraging phases play a critical role in restoring 
healthier market conditions. They flush out excess leverage, reduce forced- 
selling risk, and shift control away from overextended short-term traders. 
Historically, such phases become visible when XRP open interest on Binance 
falls below its semi-annual average, as is the case now. Past cycles show that 
once leverage is rebuilt gradually—and participation returns without excessive 
crowding—price action often stabilizes first and recovers later. While this 
does not guarantee an immediate rally, the current cleanup phase reduces 
downside fragility and lays the groundwork for a more sustainable move if 
demand re-emerges. Related Reading: US Institutions Step Back From Ethereum: 
Coinbase Premium Flashes Caution XRP Price Action Details XRP is trading just 
below the $2.00 psychological level, hovering around $1.89. This is a zone 
that has repeatedly acted as short-term support over recent months. Declining 
moving averages compress the price, signaling persistent downside pressure and 
weak momentum. The 50-period moving average (blue) continues to slope downward 
and now acts as dynamic resistance near the $2.30–$2.40 region. Above it, the 
100-period moving average (green) reinforces this resistance cluster, 
confirming that medium-term trend control remains with sellers. More 
importantly, XRP is now leaning on the 200-period moving average (red), which 
has flattened and is acting as a critical structural support around the 
$1.85–$1.90 range. Historically, sustained trading near the 200 MA often marks 
transition zones between continuation and broader trend failure. A clean break 
below this level would expose risk toward prior demand zones near $1.60–$1.70. 
Related Reading: Bitcoin Stuck In Bear Mode For 83 Days: Trend Pulse Confirms 
Structural Weakness Volume remains muted, suggesting market apathy rather than 
panic selling. This aligns with the broader derivatives deleveraging we’ve 
already observed, suggesting that the market has largely flushed out 
speculative pressure. For any meaningful recovery, XRP must reclaim the 50 MA 
and hold above $2.00. Until then, price action points to consolidation under 
resistance. The direction hinges on whether long-term support continues to 
hold or finally gives way. Featured image from ChatGPT, chart from 
TradingView.com

XRP Derivatives Reset: Open Interest Drops Nearly 60% From July Peak

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