Headline: XRP slips under $2 as derivatives deleveraging drags momentum — what traders should watch XRP is trading below the $2 psychological mark, hovering around $1.89 as the market drifts into a period defined more by caution than conviction. After a powerful rally earlier in the cycle, price action has cooled and participation has thinned: recent bounce attempts have failed to generate sustained follow-through, leaving XRP stuck in consolidation. Derivatives unwind drove the turn The shift toward apathy began in the derivatives market. Open interest (OI) on Binance hit an all-time high of $1.76 billion on July 17, creating a heavily crowded book. As volatility rose and price stalled, that leverage began to unwind—culminating in a sharp correction. XRP plunged from $3.55 to $1.83, a drawdown of nearly 50%, underscoring how tightly price and leverage were linked during the distribution phase. Since the October 10 liquidation event, Binance XRP open interest has dropped below $500 million and remained suppressed. Overall, XRP OI has declined by roughly 60%, a large-scale destruction of derivatives liquidity that reflects broad position unwinding rather than a sudden collapse in spot demand. Part of the OI fall is also mechanical: lower XRP prices reduce the dollar notional of outstanding futures, amplifying the contraction in OI. Why deleveraging matters While painful, this deleveraging serves a structural purpose: it flushes excess leverage, lowers the risk of forced selling, and shifts market control away from overextended short-term traders. Historically, once leverage rebuilds gradually and participation returns without overcrowding, price stability and eventual recovery become more likely. That said, a cleanup phase does not guarantee an immediate rally—only a healthier foundation if demand re-emerges. Technical picture and key levels - Price: ~ $1.89, under the $2 mark and relying on short-term support in the $1.85–$1.90 area. - Moving averages: The 50-period MA is sloping down and acting as resistance near $2.30–$2.40; the 100-period MA reinforces that cluster. The 200-period MA has flattened and is now a structural support around $1.85–$1.90. - Risk: A decisive break below the 200 MA would expose prior demand zones near $1.60–$1.70. - Volume: Muted—consistent with market apathy rather than panic selling. What traders should watch For any meaningful recovery, XRP must reclaim the 50-period MA and hold above $2.00 to draw in renewed speculative interest. Until that happens, the most likely path is continued consolidation beneath resistance while the market searches for a new equilibrium. Bottom line XRP’s current slump is less a story of collapsing spot demand and more a derivatives-led reset. The heavy crowding from mid-2025 has been pared back, removing short-term fragility. If participation returns carefully and leverage is rebuilt gradually, the groundwork is in place for a more sustainable move higher — but that scenario depends on reclaiming key technical levels and a pickup in volume. Read more AI-generated news on: undefined/news
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