XRP is trading below $2.00 as the market enters a phase defined by apathy and uncertainty, with fewer participants and less conviction on both sides. After a strong rally early in the cycle, price performance has cooled significantly, and recent attempts to regain momentum have failed to attract sustained follow-through. The current environment reflects a situation in which markets are no longer driven by active speculation, but are instead weighed down by caution and a lack of clear direction catalysts.
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Top analyst Dirkforst explains that the change started in the derivatives market. After Binance’s XRP open interest surged to an all-time high of $1.76 billion on July 17, the positioning became increasingly crowded. As prices stalled and volatility increased, that leverage began to loosen.
As a result, open interest contracted significantly and a significant price correction occurred. XRP fell from $3.55 to $1.83, a drawdown of nearly 50%, highlighting how tightly linked price and leverage were during the distribution stage.
A falling moving average compresses prices, indicating sustained downward pressure and weak momentum. Most recently, Binance XRP open interest fell below $500 million, a level it has remained at since the extraordinary liquidation event on October 10th.
This sustained compression indicates that although the market has largely cleared out excess leverage, there is no renewed speculative interest, with XRP remaining below $2 and searching for a new equilibrium.
Deleveraging resets market structure after liquidity flush
Overall, XRP open interest has declined by nearly 60%, indicating a significant destruction of liquidity in the derivatives market, especially after the October 10 (10/10) liquidation event. This contraction reflects widespread unwinding of leveraged positions rather than a sudden collapse in spot demand. The derivatives layer has thinned significantly as positions have been forced out or closed out voluntarily, and the market is far less crowded than at its peak in mid-2025.
It is also important to recognize the mechanical impact of price on open interest. As the price of XRP fell, the notional value of outstanding futures contracts fell with it, which naturally widened the OI contraction. In other words, part of the decline reflects not only traders exiting positions, but also the decline in prices reducing leverage in dollar terms. Still, the scale of the decline suggests that speculative activity has reset in earnest.
Taking a step back, these deleveraging steps play a key role in restoring healthier market conditions. They flush out excess leverage, reduce the risk of forced sales, and transfer control from overextended short-term traders. Historically, such situations are most noticeable when Binance’s XRP open interest is below the half-year average, as it is now.
Past cycles have shown that as leverage is gradually rebuilt and participation is restored without undue congestion, price movements often first stabilize and then recover. While this does not guarantee an immediate rally, the current cleansing phase reduces vulnerability on the downside and lays the foundations for a more sustainable move should demand reappear.
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XRP price action details
XRP is hovering around $1.89, just below the psychological level of $2.00. This is a zone that has repeatedly acted as short-term support in recent months. A falling moving average compresses prices, indicating sustained downward pressure and weak momentum.
The 50-period moving average (blue) continues its downward trend and is currently acting as dynamic resistance near the $2.30 to $2.40 area. Above that, the 100-period moving average (green) has strengthened this resistance cluster, confirming that medium-term trend control remains on the seller side.
More importantly, XRP is currently relying on the 200-period moving average (red), which has flattened and is acting as important structural support around the $1.85 to $1.90 range. Historically, sustained trades near the 200 MA often indicate a transition zone between continuation and broader trend failure. A full break below this level could pose a risk towards the forward demand zone around $1.60-$1.70.
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Volume remains subdued, suggesting market apathy rather than panic selling. This is consistent with the widespread derivative deleveraging we have observed so far, and suggests that the market has largely wiped out speculative pressure.
For a meaningful recovery, XRP needs to recover the 50 MA and sustain above $2.00. Until then, the price trend shows consolidation below the resistance. The direction depends on whether long-term support continues to hold or whether it finally succumbs.
Featured image from ChatGPT, chart from TradingView.com
