XRP is seeing unusual activity in its derivatives market. Despite the token’s price weakness, open interest has been climbing. This suggests traders are opening new leveraged positions even as the market falls.
XRP is currently trading at $1.05, up 2.45% over the past 24 hours. But the picture is less rosy on the weekly and yearly charts. The token is down 8% over the past week and has dropped 43% since the start of the year. This reflects broader weakness across the crypto market.
Open Interest Rises as Price Declines
Over the past day, XRP’s open interest rose by 1.13%, reaching $2.37 billion. This figure suggests traders are betting on a move, perhaps a reversal. Meanwhile, open interest in options dipped 67% to $21.66 million. But options volume surged 16% to $5.4 million, which is a little confusing. It might mean traders are trading more short-dated options or closing old positions.
The chart shows XRP futures open interest steadily increasing over recent months. At the same time, the token has continued to post lower highs and lower lows. This divergence can sometimes precede a sharp move.
Funding rates have also turned negative. This means short traders are paying long traders to keep their positions open. It is a sign that bearish sentiment is becoming more dominant in the perpetual futures market. I think this could be setting up for a squeeze.
Negative Funding Could Support a Rebound
Rising open interest and negative funding are creating conditions that may support a potential reversal. The market appears to be “charging up for a reversal,” one analyst observed. But buyers may need to regain momentum first before bulls can take control.
Negative funding rates can sometimes precede sharp rallies. If the price suddenly rebounds, heavily leveraged short positions may be forced to close. This can trigger a short squeeze that pushes prices even higher. It is not guaranteed, but it is a setup worth watching.
Possible Sweep to $0.95
Despite the longer-term bullish outlook, XRP could first revisit $0.95. Many market watchers, including Ali Martinez, have forecast a fall to this level and even lower.
The idea is that the market may target liquidity below current prices before reversing. Such liquidity sweeps happen when the price briefly moves into areas with large clusters of stop-loss orders. This can flush out excess leverage before a new trend begins.
If buyers step in after that move and overall sentiment improves, XRP could be positioned for a stronger recovery. But it is a risky play.
The Case for Deeper Bear Markets
Notably, XRP is down about 69% from its July 2025 peak of $3.66. While significant, this decline is milder than past bear markets. Previous cycles saw drops of 85%–96%, such as in the 2013–2014 and 2018–2020 periods.
If XRP matched its worst historical drop of 96%, the price could fall near $0.15. That would be about 87% below current levels. Ali Martinez recently floated this target as a possibility. It would place XRP at a level last seen in 2017.
Regardless of how low the coin may go, many believe buying XRP under $1 offers significant opportunity for the next bull run. I suppose only time will tell if that bet pays off.
