XRP’s Leveraged Traders Get Wiped Out as Spot Holders Stay Put

The story in XRP is a split screen: the derivatives market just went through a violent, one-sided purge of leveraged bets, while network usage keeps climbing.

XRP trades for $1.04 at the time of writing. The recent move was driven by a liquidation cascade: an 830% spike in long liquidations, which is a mechanical event rather than a sentiment reading. Margin thresholds were breached and positions were force-closed automatically. The roughly $3M in long liquidations dwarfing the short side confirms how one-sided it was, this was a purge of upside bets, not a balanced deleveraging. The climax came on June 22 with a $6.7M flush, the single largest burst of forced selling on the chart, landing exactly as price hit its lowest point near the $1.05 range.

What happened next matters as much as the flush itself. According to recent report, shared by CryptoQuant, open interest dropped from $1.18B to $1.04B, down 11%, while this played out. That’s the tell that separates a flush from a rotation: positions are being closed and not rebuilt. Traders aren’t re-entering, which leaves the market structurally lighter and less amplified than before.

The Funding Rate Hit Its Floor

The funding rate adds the second layer. It reached its deepest negative reading of the entire March-to-June window right at the June 22 climax, a -463% shift against the quarterly baseline. Negative funding means shorts are the dominant paid position, longs are effectively being compensated just to hold their positions open.

This is where precision matters. At extremes, negative funding is mechanically unsustainable, because shorts eventually have to cover, which can create upward price pressure. But that’s a precondition for a squeeze, not a guarantee of one, and it should not be read as bullish on its own. It describes a compressed setup, a spring under tension, without saying anything about whether or when it releases.

The Split That Defines Who Actually Sold

Here’s the most analytically important data point in the whole picture. While the futures market cascaded, Binance spot reserves fell just 0.35% on the week. Spot holders, in other words, didn’t panic-sell onto exchanges. That cleanly separates two very different actor types: leveraged speculators, who got wrecked, and spot holders, who barely moved.

The absence of spot capitulation during a violent futures flush is what tells you the nature of the selling. This was derivatives-manufactured, the forced unwinding of leveraged positions, rather than organic distribution by the people who actually hold XRP. That distinction changes how to read the entire episode: it was a leverage problem, not a conviction problem among holders.

 The Network Is Growing as Price Falls

Now the counter-signal. Daily active addresses rose from about 23,000 on June 14 to nearly 39,500 by June 27, a 71.7% increase in two weeks, according to Ali Charts citing Santiment. Price fell over roughly the same window. Network usage expanding while price contracts is a genuine divergence, and historically these kinds of divergences don’t tend to persist indefinitely.

Network activity on $XRP has surged over the past two weeks.

Daily active addresses have climbed from 23,000 on June 14 to nearly 39,500 today, signaling growing on-chain participation. pic.twitter.com/lqX9oo3AsS

— Ali Charts (@alicharts) June 28, 2026

It’s important to be exact about what this does and doesn’t say. It doesn’t predict direction. What it indicates is that the chain is being used more, not abandoned, real engagement separating from speculative price behavior. Set against the derivatives picture, the contrast is stark: the futures market shows panic, while the network shows growth.

The Setup, and What Could Confirm a Direction

Put the layers together and what you have is structural cleanup, not a directional call. The leverage has been flushed, open interest has compressed and isn’t rebuilding, funding sits at an extreme, spot holders stayed put, and on-chain activity is rising. That combination describes a market that’s been deleveraged and is being actively used, which could resolve in either direction.

The honest framing is that the network’s continued growth provides a floor narrative, evidence the chain isn’t being abandoned, rather than a price prediction. As for what to watch: the negative funding extreme is the squeeze precondition, but the signal that would actually confirm a direction is open interest. If OI starts rebuilding alongside rising price, that’s leverage returning on the long side; if it stays compressed, the market remains light and unconfirmed either way. The deleveraging is real and largely complete.

This article is for informational purposes only and does not constitute financial advice. Consult a professional before making investment decisions.

Author

Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP.

Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem.

To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem.

His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.

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