Saad Ullah
The XRP (Ripple) futures landscape is experiencing one of its most dramatic resets in recent memory. Funding rates have flipped negative, premiums are deeply underwater, and open interest has crashed to levels not witnessed since XRP was trading in the $0.35–$0.40 range. This wholesale flush of long positions has effectively cleared the decks, creating conditions ripe for explosive volatility in either direction.
Funding and Premium Signal Complete Washout
Cryptoinsightuk highlights that XRP's funding and premium indicators have dropped to near-historic lows. The data tells a stark story: funding rates have turned negative, meaning shorts are actually paying longs to maintain their positions, while premiums have similarly collapsed into negative territory.
This dual signal confirms overwhelming bearish sentiment has gripped the derivatives space. When positioning gets this lopsided, markets often respond with sharp counter-moves as the imbalance becomes unsustainable.
Open Interest Plunges to Mid-2024 Levels
Perhaps the most striking development is the complete evaporation of open interest. Current OI readings match those from when XRP traded between $0.35 and $0.40, yet the spot price holds steady around $2.42. This divergence is noteworthy: while speculative leverage has been systematically wiped out through liquidations, actual spot demand appears resilient. The gap between vanishing derivatives interest and stable underlying price suggests real buyers are absorbing supply without relying on borrowed capital. When OI drops this dramatically while price remains elevated, it often precedes violent moves as the market becomes highly responsive to fresh capital flows.
Two Paths Forward
The leverage reset has cleared the board, leaving two distinct scenarios in play. If shorts maintain control and spot buyers lose conviction, XRP could drift toward $2.20 as the path of least resistance tilts lower. Conversely, any sustained buying pressure could trigger a brutal short squeeze, with covering potentially launching price back toward $2.80 or even $3.00. With long-side leverage essentially eliminated, the market is more balanced than it's been in months, but that balance also means lower resistance to sudden directional breaks in either direction.
Saad Ullah
