bearish

XRP open interest hits rock bottom, prompting concerns

XRP's open interest hits a 2025 low, signaling a shift in sentiment among altcoin traders. Is this a temporary dip or are investors losing faith in XRP? Find out more here.

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XRP Price Decline and Market Sentiment

XRP, a prominent cryptocurrency, witnessed a significant price decline of 16.8% between Feb. 23 and Feb. 26. This drop led to approximately $79 million in leveraged long futures liquidations, indicating a notable shift in market sentiment.

Market Analysis and Open Interest

Despite a positive regulatory outlook and increasing chances of a spot XRP exchange-traded fund (ETF) approval in the United States, the correction in XRP's price occurred. Open interest in XRP futures plummeted to its lowest level in 2025, hinting at traders unwinding leveraged positions.

To delve deeper into the situation, it is crucial to analyze the funding rate of perpetual contracts (inverse swaps). This rate, reflecting leverage demand balance, has remained near zero for XRP's 8-hour funding rate since December 9, underscoring equilibrium between bullish and bearish sentiment.

Factors Influencing Market Behavior

  • The ongoing lawsuit by the US Securities and Exchange Commission (SEC) against Ripple continues to cast a shadow of uncertainty over XRP, impacting investor confidence.
  • Reports of Ripple CEO Brad Garlinghouse's unsuccessful attempt to advocate for a Strategic Digital Asset Reserve with the US government have added to concerns within the XRP community.
  • Market participants are closely monitoring the potential approval of a spot XRP exchange-traded fund (ETF) in the US and the outcome of the SEC's charges against Ripple, which could significantly sway market dynamics.

Expert Insights and Future Outlook

Industry experts like John Reed Stark have criticized the cryptocurrency sector for lacking transparency and accountability, contributing to the uncertainty surrounding XRP's future performance. As traders cautiously navigate these developments, the market's response to regulatory decisions and legal proceedings will play a pivotal role in shaping XRP's trajectory.

In conclusion, the recent decline in demand for XRP futures reflects a cautious approach among traders, potentially indicating a shift towards alternative investment opportunities or a wait-and-see stance amidst prevailing market uncertainties.

Disclaimer: This article serves as informative content and does not constitute legal or investment advice. The opinions expressed herein are solely those of the author and may not align with the views of Cointelegraph.