XRP Futures Liquidations Soar: Is the Spot ETF Hype Losing Steam?
Between February 23 and February 26, the price of XRP fell by 16.8%, resulting in leveraged long-future liquidations worth $79 million. Notably, the reversal took place in spite of a generally favorable regulatory environment and growing chances of a spot XRP ETF in the US being approved.
Open interest in XRP futures also dropped to its lowest level since 2025, suggesting that traders have started reducing their leveraged holdings. This change raises questions about whether XRP’s bullish momentum has waned, even though it does not necessarily portend a general bearish attitude. XRP futures’ total open interest fell to XRP 1.33 billion, an 8% decrease from the week before. In contrast, the aggregate futures market for DOGE stayed unchanged during the same period, although SOL open interest decreased by 4%.
XRP Funding Rate Stays Neutral: What Does This Mean for Future Price Movements?
Since December 9, XRP’s 8-hour funding rate has stayed close to zero, suggesting that bulls and bears have an equal desire for leverage. The last temporary spike in demand for leverage was on December 4, 2024, when XRP’s price had risen 140% in just two weeks. Notably, a steep 22% drop in less than three days before this purchasing pressure climax. The funding rate was below 0.05% every 8 hours or 0.45% per month as of December 3, 2024. This implies that prior to the correction, leverage buyers had already taken an aggressive stance.
However, the state of the market now is very different from December 2024. The most recent spike in XRP‘s price occurred between February 12 and February 15, when it rose 17% from $2.41 to $2.83. Data on funding rates, however, does not indicate a rise in leveraged demand. This implies that either XRP holders turned their attention to other cryptocurrencies or grew unduly hopeful following the significant gains in late 2024.
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