XRP Rally Fueled by Speculative Leverage as ETFs Launch

XRP has distinguished itself from the broader cryptocurrency market recovery with a standout performance over the past 24 hours, climbing 7% to reach the $2.19 level. This breakaway rally coincides with significant institutional developments as Franklin Templeton and Grayscale have launched their exchange-traded funds on the New York Stock Exchange Arca. The products, trading under tickers XRPZ and GXRP, represent a milestone in XRP’s institutional adoption journey, bringing fresh attention and capital to the cryptocurrency.

While the broader crypto market has shown signs of recovery from recent declines, XRP’s 7% surge significantly outpaces the general market movement. The timing of this price action directly aligns with the ETF launches, suggesting that institutional validation through these new investment vehicles has provided substantial momentum. However, beneath this surface-level optimism, concerning data points to potential trouble ahead for the sustainability of this rally.

According to analysis by CryptoQuant community analyst Maartunn, the XRP Open Interest Delta RSI has surged into what market technicians consider overheated territory, recently climbing above the critical 70 level. This technical indicator measures the speed and magnitude of changes in XRP’s Open Interest, which represents the total amount of positions currently open across all derivatives exchanges. The rapid ascent into this zone indicates that investors have been aggressively opening derivatives positions within a compressed timeframe.

Maartunn characterizes this pattern as ‘a classic sign of speculative leverage,’ where traders use borrowed funds to amplify their positions, creating potential instability in the market. While the overall Open Interest remains notably lower than earlier monthly highs, the sharp recent uptick in the Delta RSI metric suggests that leverage is building rapidly behind the scenes. Historical analysis of this indicator reveals a concerning pattern: previous instances where the metric broke into this overheated territory have often coincided with local price tops for XRP.

The current situation presents a curious divergence from historical precedent. Despite the sell signal flashing in the derivatives data, XRP has continued its upward trajectory, creating tension between the technical warning signs and the ongoing price strength. This disconnect raises questions about whether the rally can maintain its momentum in the face of what appears to be unsustainable leverage buildup in the derivatives market.

Complementing the derivatives concerns, on-chain analytics firm Glassnode has highlighted another critical dynamic in XRP’s recent price behavior. The cryptocurrency’s recent drop below the $2 level triggered a massive loss-taking event among investors, revealing the psychological importance of this price threshold. Glassnode’s data shows that this pattern has repeated multiple times throughout 2025, with each retest of the $2 level prompting significant capital flight.

‘Since early 2025, each time XRP has retested $2, investors have realized $0.5B–$1.2B per week in losses,’ Glassnode noted in their analysis. This consistent behavior underscores how heavily this specific price level influences investor spending and decision-making patterns. The magnitude of these realized losses—ranging from half a billion to over a billion dollars weekly—demonstrates the substantial financial impact of XRP’s volatility around this key psychological barrier.

The combination of derivatives overheating and persistent loss-taking at the $2 level creates a complex risk profile for XRP’s current rally. While the ETF launches from Franklin Templeton and Grayscale have provided legitimate fundamental support, the technical and on-chain data suggest that underlying market structure may not be as healthy as the surface price action indicates. Investors now face the challenge of balancing the positive institutional developments against warning signs in both derivatives positioning and on-chain behavior.