XRP Price Drop: Is ETF Approval Still on the Horizon?
XRP Price– XRP’s price took a significant hit between February 23 and February 26, declining by 16.8%. This drop led to $79 million in leveraged long futures liquidations. The correction happened despite a largely positive regulatory outlook for XRP and increasing odds of the approval for a spot XRP exchange-traded fund (ETF) in the United States.
Alongside the price drop, open interest in XRP futures reached its lowest point in 2025, indicating that traders were unwinding leveraged positions. While this doesn’t automatically signal a bearish market, it raises questions about the sustainability of XRP’s bullish momentum. The aggregate open interest dropped to XRP 1.33 billion, marking an 8% decline from the previous week. Comparatively, open interest in SOL futures fell by only 4%, and DOGE futures saw no significant change.
Leverage Demand and XRP’s Funding Rate
An essential metric to track for understanding market sentiment is the funding rate for perpetual contracts. XRP’s 8-hour funding rate has hovered near zero since December 9, indicating a balanced demand between bulls and bears. This neutral position contrasts with the sharp increase in leverage demand seen in December 2024, just before a 22% correction in XRP’s price.
Uncertainty Surrounding SEC Lawsuit and ETF Approval
A major factor dampening XRP’s momentum is the ongoing lawsuit from the US Securities and Exchange Commission (SEC). While the SEC has withdrawn cases against major exchanges like Coinbase and Robinhood, it continues to pursue its case against Ripple. This legal uncertainty has left investors in a holding pattern. A resolution of the SEC case in Ripple’s favor could spark a sharp rally, but until then, demand for XRP futures remains subdued.
Declining XRP Demand Suggests Market Caution
Reduced futures demand for XRP reflects broader market uncertainty, with traders seemingly shifting their focus to other opportunities. This decline could also signal a loss of investor confidence regarding the approval of a spot XRP ETF or a favorable outcome in Ripple’s ongoing legal battle. As such, caution remains prevalent in the XRP market.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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