Key takeaways:

• XRP open interest remains elevated despite a recent market drop, suggesting lingering bearish liquidation risks.
• Low on-chain activity on the XRP Ledger contrasts with funding and aggregate price momentum.

Open Interest Decline Despite Support Test

XRP dropped approximately 15%, pulling back from its recent peak of $3.66 on July 18. Accompanying this pullback was a significant $2.4 billion reduction in XRP futures open interest, dropping to an $8.8 billion low. An all-time high of $11.2 billion was reached on July 18 before this sharp decline.

Current open interest, though down 21% in USD terms, represents a 12% decline from its daily peak measured in XRP units and is still 48% higher than the level one month ago (in XRP terms). Despite this decrease, $8.8 billion remains an elevated level, roughly equivalent to $0.35 per XRP at the July 18 $3.66 high.

The reduction in open interest has led market participants to speculate that some traders are closing positions or shifting their focus elsewhere, though substantial leverage remains on the books. Liquidations during the period ending July 25 totaled $325 million.

The chart clearly illustrates a correlation: aggregate XRP futures open interest reached an all-time high ($11.2 billion) at the market peak on July 18, likely funding the 68.7% rally from $2.17 to $3.66. Given the liquidations, the message seems to be that excessive bullish leverage has been partially flushed out, but concerns persist despite open interest remaining elevated.

Futures Premium Signals Neutrality on $3 Support

An analysis of monthly XRP futures pricing via an annualized premium metric offers further insight.

Monthly XRP futures typically trade at a 5% to 10% annualized premium relative to spot markets under neutral sentiment. This week, consistent trading occurred at a 6% to 8% annualized premium for the 3-month contract, indicating that the recent price pullback hasn’t fundamentally shaken confidence in $3 support from the perspective of market makers and longer-term holders. This is contrary to the expectation of a sharp run-up if support were “strong.”

Importantly, despite XRP briefly rising to approach the prior $3.66 high, there wasn’t a corresponding surge in demand for near-term bullish leverage, thus damping the risk of cascading liquidations triggering a snapback below support under routine volatility. This perceived exhaustion of the tailwind could indicate a larger consolidation ahead.

Speculation vs. Substance: ETF Fueled Optimism Challenged

Part of the recent XRP optimism stems from speculation about a U.S. spot ETF approval, particularly following Ethereum ETF success. However, this catalyst faces significant hurdles and potential delays.

Furthermore, lingering hype around a potential XRP Ledger partnership with SWIFT, coupled with unsubstantiated rumors claiming multiple bank adoptions, has fueled sentiment but lacked foundational traction on the network.

Fundamental adoption metrics highlight this disparity.

Weak On-Ledger Activity Despite Speculative Buzz

While speculation swirls, real-world utility indicators on the XRP Ledger remain relatively modest.

According to RWA.xyz, tokenized real-world assets (RWA) on the network stood at $134 million recently, significantly underperforming leading blockchains and failing to enter the top 10 rankings. Data shows just 0.18% growth for RWA between July 2 and July 26.

Decentralized exchange (DEX) activity paints a similar picture. XRP Ledger placement is below the top 50 networks by 30-day volume on DefiLlama, with aggregates around $95 million vs. competition from popular blockchains like Sui’s $13.3 billion. DEX volume has actually decreased 86% MoM despite the price peak.

Though XRP derivatives currently signal a neutral market stance, persistent weakness in on-chain, off-chain, and DeFi adoption metrics suggests that any sustained bullish momentum above $3 will require verifiable demand for the XRP Ledger ecosystem.