XRP (XRP) is experiencing increased downside pressure as derivatives activity and on-chain positioning decline throughout December. These indicators suggest a market still in risk-off mode, even as price stabilizes near a crucial technical support around $2.00.
Key takeaways:
XRP futures taker buy volume on Binance has dropped by 95.7% since July, reflecting diminished demand.
XRP’s Estimated Leverage Ratio (ELR) has decreased to 0.18, representing widespread deleveraging and lower speculative risk.
Retail, mid-sized, and large wallets are all exhibiting negative cumulative volume delta through December, confirming widespread selling pressure.
XRP futures demand plummets as liquidity dries
Data from CryptoQuant revealed that XRP’s futures taker buy volume on Binance peaked over $5.8 billion in July but has since fallen to about $250 million, a reduction of nearly 96%. This decline points to a stark contraction in buying pressure, not only for XRP but across the broader altcoin sector.
The taker buy-sell ratio has mostly remained negative during this time, denoting that sellers have persistently outperformed buyers in XRP derivatives flow. With liquidations on the rise and trust still shaky after the Oct. 10 event, the lack of ongoing bid-side activity indicates that downside risks are still significant. Even the optimism surrounding ETFs has not significantly revived demand.
XRP leveraged positions reset amid strong market de-risking
Binance data indicates that XRP’s Estimated Leverage Ratio has fallen to around 0.18, one of the lowest levels in the current cycle, coinciding with prices dropping from above $3.00 toward the $2.00 mark. This decline points to traders actively reducing or closing leveraged positions as a reaction to the prolonged market downturn.
While lower leverage mitigates the risk of cascade liquidations, it also reflects diminished speculative interest. Such environments signify transitional phases during which markets rebalance before defining a clearer directional trend.
Related: Most crypto sectors lagged Bitcoin over past 3 months: Glassnode
Profit-taking and wallet data suggest minimal order books
Glassnode senior researcher CryptoVizArt reported that on Dec. 11, a 5 to 7-year-old XRP wallet with a cost basis of $0.40 realized over $721.5 million in profit, indicating a significant distribution event as the price weakened around the $2.00 mark.
Order-flow data from Hyblock Capital bolstered this bearish outlook. XRP’s cumulative volume delta for December is negative across all participant groups: retail wallets ($0–$10,000) at -$8.68 million, mid-sized wallets ($10,000–$100,000) at -$6.89 million, and large wallets ($100,000–$10 million) at -$34 million. The data reflects consistent net selling, with no group displaying prolonged buying pressure.
Overall, XRP is situated in a low-demand, low-leverage context, with indications suggesting consolidation or further downside unless liquidity conditions significantly improve.
Related: Ripple pilots RLUSD on Ethereum L2s in multichain push
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
