XRP News Today: XRP's 50% Open Interest Drop: Bearish Signal or Buying Opportunity?

XRP's open interest has experienced a dramatic 50% decline since October 7, falling to $4.2 billion from a peak of $9.15 billion, according to data from CoinGlass and CME Group, as noted in a U.Today report. This sharp contraction coincided with a 50% price drop for the token, which briefly fell to $1.25 before recovering to $2.37. The collapse in open interest reflects heightened bearish sentiment, with long liquidations surging and negative funding rates dominating the futures market, according to an FXEmpire analysis. Analysts attribute the decline to macroeconomic uncertainties, delayed U.S. regulatory clarity on crypto, and the broader market crash triggered by President Trump's tariff announcements, per a Cointelegraph analysis.

The open interest plunge has been accompanied by a 65-74% drop in XRP trading volumes across major exchanges like Binance, Bybit, and OKX, signaling reduced liquidity and speculative activity, a trend highlighted earlier by U.Today. On-chain data further reveals a 30% monthly decline in open interest to $3.89 billion, reinforcing bearish momentum as investors close positions ahead of potential further price declines, according to a Blockonomi analysis. Technical indicators align with this trend: XRP's price remains below key moving averages (21 EMA at $2.85 and $3.00 resistance), and a bearish descending triangle pattern suggests a potential 45% drop to $1.20 if the $2.00 support level fails, as noted in the Blockonomi piece.

Market structure analysis highlights fragile liquidity conditions during the October 10 crash, where XRP's bid-side depth evaporated entirely on Binance Futures, causing prices to plummet from $2.50 to $1.19 within hours. This liquidity vacuum exacerbated cascading liquidations, with over $19.3 billion in crypto positions wiped out globally, a dynamic covered by Cointelegraph. For XRP specifically, the collapse in open interest mirrors historical patterns, such as the January 2025 peak followed by a 53% decline to $1.61 by April, per the Blockonomi analysis.

Despite the bearish outlook, some analysts identify potential catalysts for a rebound. A breakout above $2.65 resistance could trigger a rally toward $2.85 and $3.00, with the 21 EMA and psychological $3.00 level acting as key benchmarks. Institutional adoption, including a $121 million XRP treasury by VivoPower and growing ETF speculation, has also fueled cautious optimism. However, these bullish scenarios depend on XRP maintaining above $2.00 support, where whale activity has historically stabilized the token, according to a Brave New Coin insight.

The resolution of Ripple's legal battle with the SEC remains a critical wildcard. A favorable ruling could unlock institutional demand and drive XRP toward $10 by year-end 2025, though continued litigation risks further volatility. For now, the market remains in a consolidation phase, with technical indicators like RSI (51) and MACD (0.334) suggesting a balance between bearish and bullish forces.