XRP Open Interest Crashes to 2024 Lows, Analysts See Bullish Setup

On-chain analytics platform CryptoQuant has reported a dramatic contraction in XRP’s derivatives market activity. According to analyst Arab Chain, open interest for XRP futures contracts on Binance has fallen to approximately $453 million, marking the lowest level recorded since the end of 2024. This figure represents a stark decline from earlier periods in the year when open interest repeatedly exceeded $1 billion, coinciding with strong price surges for the altcoin.

Arab Chain’s analysis of XRP Ledger data points to a “clear rebalancing” in the derivatives market. The analyst notes that the current landscape is “markedly different” from the first half of the year and mid-2025, when elevated open interest sparked significant volatility. The metric has declined both gradually and then sharply, which Arab Chain interprets as a “significant exit by short-term speculators.” This development reflects a fundamental shift in trader behavior and confirms a substantial decrease in leverage usage compared to previous, more speculative periods.

The sharp drop in XRP open interest carries dual implications for the market’s future trajectory. The first, as explained by CryptoQuant’s Arab Chain, is that the decline in risk appetite and weakening momentum in the derivatives market help explain the recent volatile price behavior. In the absence of strong, liquidity-driven breakouts, prices have lacked sustained directional momentum.

However, the second implication is decidedly more positive. Arab Chain posits that this contraction represents a “healthy structural development” for XRP. By significantly reducing overall leverage in the market, the risk of cascading forced liquidations is diminished. This mitigates the abnormal selling pressures typically associated with excessive leverage, creating a more stable foundation for price discovery. The analyst suggests that periods of low open interest often act as transitional phases, where the market shifts from a highly speculative environment reliant on derivatives to a calmer one that depends more heavily on genuine spot demand.

Against this backdrop of clearing speculative excess, several crypto analysts are pointing to technical patterns that suggest XRP may be preparing for another significant upward move. Crypto analyst Niels observed in an X post that the altcoin is forming a “higher low” around current levels. He noted this is a similar structure to the one that formed in April of this year, which preceded a rally to a new all-time high (ATH). Niels added that a decisive price push above the $2 level could put bulls firmly in control of the market.

Another analyst, Chart Nerd, has offered an even more bullish prediction. He stated that XRP could reach a new ATH on its next leg upward, noting the altcoin was in the middle of an “ABC reset.” His accompanying chart analysis projected that XRP could reach as high as $4.50 on this expected impulsive move. Chart Nerd anticipates this rally could materialize in the first half of next year. While it remains uncertain if XRP could replicate the 600% surge seen last year, these technical perspectives align with the notion that a market cleanse of leverage can precede a strong organic advance.

At the time of the original report, XRP was trading around $1.84, showing a decline over the previous 24 hours. This price action occurs within the context of the described market reset, where decreased derivatives activity may lead to reduced short-term volatility even as longer-term bullish structures are formed. The convergence of low open interest data from CryptoQuant and optimistic chart readings from independent analysts paints a picture of a market potentially poised for a healthier, demand-driven rally.