XRP Rallies on Derivatives Leverage as Exchange Supply Stays Locked

TLDR:

• XRP gained 39% since August 18 while Binance exchange reserves stayed nearly flat overall.
• Long liquidations hit $25.7 million on August 22, the largest single day over the past six months.
• Funding rates cooled from 0.010 to 0.002 across three sessions as open interest fell 13% from its peak.
• Total XRP transactions rose 97% to 2.93 million daily, but transfers to exchanges collapsed.

---

XRP traded at $1.396 on August 29, marking a notable shift in market structure. The token sits roughly 39% above the $1.00 level it held through August 18, though still about 8% below its recent high of $1.520 on August 23.

Binance open interest for XRP peaked near $558 million during that session before easing to $483 million. The rally appears driven by derivatives activity rather than exchange supply movement, based on recent on-chain data.

Leverage Fuels the Move While Exchange Supply Stays Quiet

Funding rates for XRP averaged 0.006 over the recent stretch, well above the quarterly baseline. The estimated leverage ratio climbed to 0.193, close to the six-month maximum of 0.213. That combination points to derivatives traders, not spot sellers, powering the recent repricing.

Long liquidations rose sharply alongside the rally. They averaged $4.34 million, up 222% week over week. A single session on August 22 saw $25.7 million in long liquidations, the largest of the six-month window.

Source: Cryptoquant

That liquidation spike came on a day when the price closed higher. Rising prices alongside rising long liquidations usually signal crowded positions being cleared within an uptrend. It does not typically signal a reversal against the trend.

Exchange data tells a separate story. Binance inflows averaged 136,319 XRP over the past week, while outflows averaged 298,660 XRP. Both figures are near 2% and 4% of their six-month averages, a sharp drop from typical activity levels.

Deposit addresses on Binance fell to 45, a 91% decline versus the quarterly baseline. The exchange reserve itself barely moved, up just 0.04% week over week to $2.618 billion. Holders appear to be sitting still rather than preparing to sell.

On-Chain Activity Expands as Traders Watch Support Levels

Total XRP transactions rose to 2.93 million daily, up 97% versus the quarterly average and near a six-month high. Network usage expanded even as coins avoided exchange-bound transfers. NVT climbed 44% week over week alongside that activity increase.

Funding has already started cooling, dropping from 0.010 to 0.002 across three sessions. Open interest is down 13% from its recent peak. Leverage is unwinding while spot supply continues to stay off exchanges.

This setup has historically preceded one of two outcomes for XRP. Either a base-building phase emerges once positioning normalizes, or a faster retracement follows if exchange reserves begin climbing again. The direction likely depends on which side dominates first.

Retail sentiment on social platforms reflects a similar wait-and-see posture. Analyst Diana (@InvestWithD) pointed to the $1.38 area as a key Fibonacci support zone tied to a broader Elliott Wave count.

The post noted that a 4-hour RSI reading near 47.5 had moved back above its signal line, suggesting early momentum shifts near support rather than during an overbought run.

Price action around that support level may determine whether XRP builds a new base or slips toward lower levels in the sessions ahead. Traders appear to be watching exchange reserve trends closely for the next signal.

The post XRP Rallies on Derivatives Leverage as Exchange Supply Stays Locked appeared first on Blockonomi.

Source: https://blockonomi.com/xrp-rallies-on-derivatives-leverage-as-exchange-supply-stays-locked/