With the market flipping into a bearish state, XRP is experiencing conflicting signals in on-chain activity. While some metrics are showing bullish action, other key metrics are starting to demonstrate negative trends, which brings the leading altcoin to a crucial moment that could play a key role in shaping its next price direction.

Derivatives Activity Expands On XRP

Amid the ongoing pullback in the price of XRP, the altcoin is now showcasing a notable divergence in market signals. Specifically, XRP Open Interest (OI) appears to have transitioned into a bullish state while several other key metrics have flipped into bearish territory.

After analyzing multiple metrics, Cryptoinsightuk, a market expert and investor on the social media platform X, highlighted that open interest continues to rise significantly. The rise in derivatives positioning is a clear signal that traders are becoming more leveraged and engaged in the market.

Cryptoinsightuk stated that this significant open interest rise coincides with heavily negative performance in XRP’s Funding rates and Premium. This kind of setup often precedes heightened volatility, especially as on-chain data and broader momentum hint at weakening market conditions. According to the expert, the divergence indicates that the move down is being artificially created by leveraged players. 

Currently, XRP seems to be at a crucial stage when positioning, rather than spot demand, may determine its next significant move as leverage builds against a more cautious environment. However, the expert noted that spot volume has also witnessed a spike. 

Interestingly, the rise in spot volume comes as the market saw a sweep of the recent wick into the year-long support, which led to the creation of a Bullish Divergence on the 4-hour time frame chart. 

Based on the hourly liquidity pools, the market might still have some room to grow. However, the expert is confident that a bounce from the current position is likely to take place. When the bounce occurs, it is expected to be quite violent and will spur a short squeeze back to the upside.

Investors Are Leaning More Towards Long Positions

Despite waning price action, investors seem to be eyeing a potential reversal toward the upside as they increase their bets. This bullish action is evidenced by a sharp uptick in the high-leverage long positions as reported by CW, a data analyst and crypto investor.

Positioning is getting more crowded as more money enters leveraged bets on the upside, increasing the stakes for the upcoming price surge. CW highlighted that high leverage XRP long positions are accumulating around the $1.85 mark, reflecting the significance of the level and the growing appetite for risk among investors. 

However, CW noted that whales are likely to liquidate these positions again. In another post, CW has confirmed that large orders from whales are already flooding the market. At the same time, these high-net-worth investors on the Coinbase platform have now formed a selling wall at $1.96.

In a sudden move, the cryptocurrency market flipped extremely bearish, causing major digital assets such as XRP to drop sharply. After days of trading above the $2 price mark, the altcoin has fallen below this level, bringing it to the key $1.80 support. While the leading altcoin continues to face heightened volatility, its derivatives market is telling a different story.

Traders Crowd Back Into The XRP Market

XRP’s price action and its derivatives market are moving in different directions as traders continue move back into the altcoin. On-chain data shows that derivatives activity is heating up, with Open Interest (OI) undergoing a sharp rise after weeks of downward performance or sluggish growth.

A crypto pundit and investor, Xaif Crypto, reported that XRP open interest has moved above its 30-day average as volatility reaches its highest level since November 2025. This rise in open interest is centered on Binance, the largest cryptocurrency exchange in the world.

As both speculative positioning and hedging activity pick up pace in reaction to broader price swings, the rise suggests a resurgence of trader activity. Furthermore, heightened volatility and rising open interest frequently indicate a turning point, when leverage is increasing, and the market is preparing for a big move.

The chart indicates that the total open interest is around $566 million against a 30-day average near $529 million. These figures suggest that new positions are steadily entering the market, not aggressively.  However, this is not the major signal of the trend. 

Currently, rising open interest volatility, with the standard deviation at its highest level in months, is the primary indicator. Meanwhile, the Z score is still moderate, sitting around the 0.57 level. Xaif Crypto stated that this development suggests cautious accumulation and growing risk without extreme leverage in the market. 

It is worth noting that these conditions typically unfold prior to a strong directional move. With the current setup, XRP has entered a more dynamic and reactive trading environment than it has seen in months, regardless of whether this surge of activity resolves into continuation or reversal.

A Steady Wave Of Capital Inflows

A recent CoinShares report from Xaif Crypto shows that XRP is still attracting fresh capital at a significant rate. Despite a volatile market condition, weekly inflows have extended, pointing to a growing confidence among investors in the leading altcoin.

In the past week, the token pulled in over $69.5 million in inflows. This figure shows that demand is persistently building beneath the surface, indicating rising accumulation rather than speculative interest. While markets have shifted toward a volatile state, fresh capital is still being rotated into XRP.

The capacity of XRP to attract investment even in slower times is becoming a more significant indicator for its medium-term prospects. As both institutional and large-scale participants flock in, this raises the discussion that a bigger move might be imminent, and these investors are positioning themselves ahead of it.

XRP lost the $2 level after the broader crypto market suffered sharp declines on Monday, dragging price action back into a fragile zone. While the move rattled traders, Binance derivatives data suggests the sell-off has not triggered an extreme leverage unwind yet. Instead, the market appears to be entering a transitional phase where risk is rising, but speculative behavior remains relatively controlled.

Open interest metrics show a delicate balance between positioning and price weakness. Total XRP open interest on Binance climbed to roughly $566.48 million, pushing above the 30-day average near $528.84 million. This spread implies that fresh positions are still being added despite the downturn, but the pace looks measured rather than euphoric. In other words, traders are stepping in cautiously, not flooding the market with aggressive leverage.

The 30-day rolling Z-Score framework helps contextualize this shift. With open interest expanding while volatility stays contained, XRP may be building the conditions for a larger move ahead. For now, however, price remains vulnerable, and the next direction will likely depend on whether liquidity returns or fear deepens.

Open Interest Volatility Rises as XRP Builds Toward a Bigger Move

Arab Chain’s CryptoQuant read shows the most important shift isn’t the headline open interest figure, but the instability underneath it. The 30-day standard deviation of XRP open interest (oi_std30) has climbed to roughly $65.7 million, marking its highest level since November. That matters because it signals open interest is starting to swing more aggressively around its average, a pattern that often shows up before price leaves a tight range and enters expansion mode.

At the same time, the leverage signal still looks contained. The Z-Score holds near 0.57, signaling an elevated but not extreme level. In practical terms, positioning is growing, but it doesn’t look like the market is overheating or entering the kind of reckless leverage phase that typically leads to instant liquidation cascades. That combination—rising volatility in positioning while the Z-Score remains moderate—suggests momentum is building without a clear directional commitment yet.

This puts XRP in a “risk-on, but cautious” environment. Traders are adding exposure, volatility is creeping higher, and the setup is becoming more reactive. From here, oi_std30 becomes a key metric to track alongside price structure, because whichever way price breaks, the market is increasingly positioned for a larger move.

XRP Slides Back Toward $1.90 as Bears Keep Control

XRP remains under heavy pressure, with the chart showing price slipping back toward the $1.90 zone after failing to hold the $2 level. The market is printing a clear sequence of lower highs and lower lows, confirming that the broader trend is still bearish despite several short-lived rebounds over recent weeks. Each time XRP attempts to recover, sellers quickly step in and cap momentum before it can reclaim key resistance levels.

The latest move highlights this weakness. XRP briefly pushed higher in early January but immediately rolled over, showing that demand is still too soft to sustain a breakout. The $2.00 region has now flipped into overhead resistance, and price will likely need a strong bullish catalyst to break back above it with conviction.

From a structure perspective, the current support area sits around $1.85–$1.90, which has acted as a short-term floor during the recent consolidation. If this zone fails, XRP could quickly revisit lower liquidity pockets, extending the downtrend.

Volume also reflects uncertainty. Activity remains erratic despite occasional, isolated spikes. This suggests the market is still reacting to fear-driven flows rather than steady accumulation. Price stalls in a fragile consolidation phase. And bulls need to reclaim above $2 to shift the short-term narrative back in their favor.

Featured image from ChatGPT, chart from TradingView.com