XRP Deleveraging Echoes Setup Before 72% Rally, Analyst Says

XRP’s derivatives market on Binance is showing a deleveraging pattern that previously appeared before substantial price rebounds, according to analysis shared on CryptoQuant. The development points to easing speculative pressure, rather than confirmation that the token has begun another sustained advance.

CryptoQuant contributor Darkfost reported that XRP open interest on Binance had dropped to about $445 million, below its 180-day average of roughly $460 million. Open interest measures outstanding derivatives contracts and provides a snapshot of exposure that remains in the market, rather than trading turnover.

According to the analysis, open interest fell nearly 28% after September 22, while XRP’s price declined about 17% over the same period. Darkfost attributed the contraction partly to the falling dollar value of positions and partly to liquidations during the sell-off.

The historical comparison is the main reason the development has attracted attention. Darkfost identified a mid-September episode followed by a 32% gain and a mid-August episode followed by a 72% rally, describing the latest contraction as potentially supportive of a short-term rebound.

Those comparisons offer context, but they do not establish a repeatable price forecast. Two earlier rebounds cannot, on their own, show how reliably the signal works across different market conditions or determine the size and timing of a future move.

The distinction matters because falling open interest and rising demand describe different developments. A reduction in outstanding futures exposure can leave the market less crowded without showing that buyers are prepared to purchase XRP at progressively higher prices. Less speculative pressure is therefore not equivalent to a bullish reversal.

Leverage allows traders to hold positions larger than the collateral they supply, magnifying both gains and losses. When adverse price moves leave insufficient collateral, positions can be forcibly closed. Those closures can intensify an existing move, which explains why analysts watch for signs that leveraged exposure is being unwound.

Dollar-denominated open interest also requires careful interpretation when the underlying asset is falling. A lower reading can reflect both changes in positioning and changes in the value of the asset itself. It should not be read as a precise measure of how much borrowed exposure traders have voluntarily removed.

The scope of the observation is another limitation: the analysis concerns XRP derivatives on Binance, not a complete picture of positioning across every trading venue. It also does not, by itself, establish the strength of demand in the spot market, where the token is bought and sold directly.

The next test is whether lighter futures positioning is accompanied by price stabilization and sustained buying. Darkfost’s assessment frames deleveraging as a condition that could help a rebound develop, not a promise of another 72% rally. Subsequent price action will determine whether the historical parallel proves useful.