XRP is trading around $1.30, up roughly 1%, while leverage in the derivatives market has declined sharply. Open interest has fallen from $1.128 billion in August to $871.22 million, representing a decrease of more than $250 million in less than a month.

The gap between XRP’s relatively stable spot market and shrinking futures activity raises a key question: are traders losing confidence in further gains, or are they simply reducing leverage while demand for the token remains firm?

Falling Open Interest Reflects Position Cuts, Not Necessarily a Bearish Shift

Lower open interest generally means traders are closing positions, getting liquidated or adjusting their exposure. In XRP’s case, the decline alone does not confirm that market sentiment has turned bearish. Traders may simply be cutting leverage without taking a clear long or short position.

The decline has occurred across major trading platforms. Binance’s open interest dropped from $558 million to $423 million, while Bybit’s fell from $379 million to $291 million. The broad declines indicate that futures exposure is being reduced across the market rather than concentrated on a single exchange.

Funding rates provide additional context. Binance’s open-interest-weighted funding rate remains positive, suggesting long positions still outnumber shorts among outstanding contracts. The overall 24-hour long/short ratio stands at 0.9904, almost evenly balanced, although the positioning of larger traders is considerably more bullish.

Data at the account level from Binance and OKX shows traders favoring long positions by approximately 2.5 to 3 times. Binance’s top traders also remain net long based on both their account positioning and total position sizes.

XRP-related liquidations reached $9.67 million over the past 24 hours. Long positions accounted for $4.87 million, compared with $4.80 million in short liquidations. The near-even split suggests the market has not experienced a broad liquidation wave dominated by one side.

The 12-hour figures were more heavily weighted toward longs, with $500.96K in long liquidations against $148.49K in shorts. That imbalance occurred during the period of weakness that came before XRP’s rebound. However, the larger 24-hour window points to a more balanced market.

ETF activity also indicates continued interest in XRP. XRP ETFs attracted $3.5 million on September 16 through Franklin Templeton’s XRPZ fund, extending the inflow streak to 10 consecutive days even though XRP declined during the session.

Other major crypto ETFs recorded weaker flows. Bitcoin ETFs saw $295 million in outflows, while Ethereum ETFs recorded $224 million in withdrawals. XRP therefore remained one of the crypto ETF categories attracting fresh net inflows.

Earlier September data shows that XRP derivatives have already gone through several positioning changes. Binance funding briefly turned negative around September 7 after heavy liquidations before moving back into positive territory.

CryptoQuant contributor Amr Taha also identified an “unusual structure” around that period, with open interest rising while perpetual CVD remained persistently negative. The divergence shows that derivatives positioning and taker-driven activity can provide different signals.

The latest decline in XRP open interest therefore appears within a broader series of leverage adjustments rather than as an isolated market event.

$1.29 Could Define XRP’s Next Direction

XRP is trading near the middle of an 8-hour parallel channel, with descending support and resistance lines containing the price over recent weeks.

On the weekly chart, the range aligns with two important exponential moving averages. The 20-week EMA sits at $1.29, while the 50-week EMA is positioned around $1.52.

A daily or weekly close below $1.29 would take XRP beneath the 20-week EMA and the related Fibonacci confluence. Such a move could bring the $1 psychological support area back into focus.

On the upside, reclaiming $1.40 would put XRP above the descending channel resistance and could open a path toward $1.60–$1.70, closer to the 50-week EMA.

For now, the $1.29 support and $1.40 resistance levels remain central to the XRP setup as traders assess whether the decline in futures leverage is simply a market reset or a sign of a larger shift in price direction.