Crypto: XRP Loses $2.4 Billion In Open Interest In Just A Few Days

The XRP derivatives market has just experienced a major shock: 2.4 billion dollars of open interest evaporated alongside a 15% price drop in just a few days. This sudden withdrawal of leverage raises questions. Should this be seen as a simple adjustment or the beginning of a deeper reversal? While some continue to bet on a bullish recovery, technical signals are becoming blurred and give way to doubt. Is XRP entering a prolonged turbulence zone?

In brief

• XRP experienced a 15% drop after reaching a peak at $3.65 on July 18, 2025.
• This decline was accompanied by a sharp drop in futures open interest, falling from $11.2 billion to $8.8 billion.
• In total, $2.4 billion of positions were liquidated, revealing a massive disengagement of leveraged investors.
• Despite this drop, open interest remains 48% higher than a month ago, signaling still significant exposure.

A record followed by a collapse: open interest freefall

On July 18, XRP reached a peak at $3.65, propelled by a bullish rally of 68.7% in two weeks. However, this move was quickly followed by a marked decline, both in price, which lost 15%, and in the derivatives market, where open interest fell by $2.4 billion. Open interest went from $11.2 billion to $8.8 billion. This significant drop suggests a disengagement from some investors heavily exposed to leverage, in a context of persistent volatility. Key points of this contraction include:
• $325 million were liquidated between July 1st and July 25th;
• Open interest in XRP contracts fell by 12% compared to the peak on July 18;
• Despite this decline, open interest remains 48% higher than a month ago, indicating still high exposure;
• This imbalance between partial deleveraging and maintaining strong leverage fuels fears of a new liquidation cycle in case of renewed market instability.
Far from a total collapse, these figures mainly show a market under tension. Part of the speculative leverage was purged, but the situation remains unstable. In case of sudden correction or low volume, the risk of a chain liquidation remains very present.

On-chain adoption in decline despite the media hype

Beyond market data, the situation of XRP reveals another form of vulnerability: that of its real adoption on the ground. While some analysts hoped to see XRP sustainably break above $4, on-chain data reveals other signals. Despite hopes linked to a potential XRP ETF in the United States, no significant increase in real demand has been observed. Three-month XRP futures continue to trade with a premium of 6 to 8%, signaling a neutral but cautious investor expectation. Furthermore, no notable increase in leveraged demand was recorded during the temporary rise above $3.60. Market participants’ caution could be explained by a series of contradictory signals. On one hand, unfounded rumors, such as adoption by major banks of the XRP Ledger or a partnership with SWIFT, circulated on social networks without official validation. On the other hand, fundamental data show that DeFi adoption remains marginal on the XRP network. To date, only $134 million of tokenized assets are circulating there, far behind competing blockchains like Avalanche ($190 million) or Sui ($13.3 billion of DEX volume over 30 days). These figures do not even place XRP in the global top 50 blockchains active in decentralized finance. In this context, the prospects of a solid XRP rebound in the short term remain uncertain. Speculative pressure seems to have eased, but the absence of clear adoption signals or solid fundamentals limits the crypto’s growth potential. As long as the XRP ecosystem fails to translate its narrative into concrete and verifiable usage, the risk of prolonged exhaustion remains.

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Frequently Asked Questions (FAQ)

XRP Market Dynamics

Q: What is open interest in the context of XRP trading? A: Open interest refers to the total number of outstanding derivative contracts (like futures or options) that have not been settled. A drop in open interest, like the $2.4 billion decrease seen in XRP, indicates that traders are closing their positions, suggesting a potential reduction in leverage and speculative activity. Q: What does a 15% price drop in XRP signify? A: A 15% price drop, especially when coupled with a significant decrease in open interest, suggests a market correction where leveraged positions are being unwound. This could signal a loss of bullish momentum or increased caution among traders. Q: Why is a decline in open interest a concern for XRP? A: A sharp decline in open interest can indicate that leveraged investors are exiting the market, possibly due to fear of further price drops or margin calls. This can lead to further price volatility if not balanced by new buying interest.

XRP Adoption and Fundamentals

Q: What are "on-chain data" and why are they important for XRP? A: On-chain data refers to information recorded on the blockchain itself, such as transaction volume, active addresses, and developer activity. Analyzing this data helps assess the actual usage and adoption of XRP beyond speculative trading. Q: What does a premium on XRP futures suggest? A: A premium on XRP futures, such as the 6-8% mentioned, indicates that investors are willing to pay more for future delivery of XRP. This can signal cautious optimism or expectations of future price increases, though it's not a definitive bullish sign on its own. Q: Why is DeFi adoption on the XRP Ledger considered marginal? A: DeFi adoption is considered marginal when the total value of tokenized assets circulating on the network is low compared to competing blockchains. This suggests limited development and user engagement in decentralized finance applications on the XRP network, which can impact its long-term growth potential. ##Crypto Market AI's Take The recent significant drop in XRP's open interest, alongside a price decline, highlights the inherent volatility and speculative nature of the crypto derivatives market. While some investors may have been caught by surprise, this deleveraging event is not uncommon in crypto markets. Our platform, Crypto Market AI, utilizes advanced AI agents to analyze market sentiment, on-chain data, and macroeconomic factors to provide a more nuanced understanding of such movements. We believe in empowering traders with data-driven insights, helping them navigate these turbulent waters by identifying potential risks and opportunities. Understanding the fundamentals, like DeFi adoption, is crucial for long-term asset evaluation, a core aspect of our AI-driven market analysis. ##More to Read:
• Why is XRP Sinking Today?
• Bitcoin News Today: AI and Data Analytics Drive Strategic 2025 Crypto Portfolios
• How to Evaluate Cryptocurrency

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Source: Crypto: XRP Loses $2.4 Billion In Open Interest In Just A Few Days