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XRP open interest has plunged to its lowest level in months, triggering alarm bells among traders as Ripple’s native token struggles to regain momentum.
With derivatives activity drying up and network demand weakening, analysts warn that XRP could face further downside, potentially derailing its long-awaited push toward $3. The sharp decline in market participation raises a critical question: Is this a temporary cooldown or the start of a deeper correction?
After consolidating tightly between $2.05 and $2.33 over the last month, XRP remains locked below key resistance, and the latest onchain and market data paint a grim short-term outlook.
At the heart of this stall is the persistent drop in XRP open interest, a crucial sentiment indicator that’s flashing red.
XRP open interest — the total value of open derivatives contracts — has dropped a steep 30% in the last few weeks, according to CoinGlass. From a recent high of $5.53 billion, OI now sits at just $3.89 billion.
This erosion of investor exposure is a red flag. “Declining open interest typically indicates that traders are closing positions and stepping to the sidelines,” said crypto market analyst Josh Olszewicz.
“It often precedes significant price corrections when coupled with weakening technical setups.”
The current drop in XRP open interest mirrors the January scenario, where a 40% drop in OI led to XRP’s plunge from $3.40 to $1.61 by April. Now, a similar setup appears to be unfolding.
Adding to bearish pressure is the fading activity on the XRP Ledger. Data from Glassnode reveals that new daily addresses have plunged to 3,500 — far from the January peak of 15,823. Daily active addresses (DAAs) tell a similar story, down to 34,360 from a recent spike of 577,000.
Such a steep drop in engagement highlights declining interest and liquidity. “Network activity is a leading indicator for price action.
When participation falls off a cliff like this, it often leads to flat or falling prices,” said Lucas Outumuro, head of research at IntoTheBlock.
This reduced network demand is closely linked to the plunge in XRP open interest, confirming an overall cooling in both speculative and organic interest.
Price-wise, XRP is struggling to break above a critical resistance band between $2.22 and $2.40.
Markets Pro data shows that this is the zone where all major simple moving averages (SMAs) converge — a notorious barrier for bullish momentum.
If bulls fail to reclaim this zone, XRP may continue trading sideways or even tumble toward $1.90 or $1.55 — levels that were previously swept during extended consolidation periods.
“XRP open interest trends support the thesis that traders are expecting more downside,” said crypto analyst CasiTrades.
“Unless $2.25 is broken decisively, we might see another leg down. $1.55 or even $1.20 remains on the table if support at $2.00 fails.”
This aligns with a descending triangle chart pattern that indicates a potential 45% correction if XRP loses its key base.
Momentum indicators are also retreating. XRP’s relative strength index (RSI) has cooled to 51, down from overbought levels of 81 back in January. This suggests growing bearish control — a trend often confirmed by falling XRP open interest.
While long-term bulls may see this prolonged lull as a setup for a breakout — reminiscent of XRP’s surge to $10 after its 2017 consolidation — the near-term technical picture remains cloudy.
Despite the current malaise, some analysts are cautiously optimistic. “XRP has been consolidating below $3 for nearly 200 days,” noted veteran trader Michaël van de Poppe. “Historically, these zones lead to large impulsive moves when the breakout finally comes.”
However, he cautioned that until XRP open interest shows signs of recovery and the network regains momentum, the bullish thesis remains speculative.
With XRP open interest falling sharply and on-chain activity weakening, the $3 milestone looks increasingly distant for now.
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