XRP Futures Rebuild After $40M Liquidation, Binance Spot Volume Plummets

XRP Futures Recover Amidst Declining Spot Volume

XRP futures markets showed signs of recovery on October 11, after a period of significant liquidations. Market data provider XRPL.to recorded $40.70 million in long liquidations across Binance, Bybit, and OKX between October 7 and 8. Despite the recent volatility, XRP was trading near $1.40 at the time of the snapshot.

While futures exposure began to rebuild, spot trading activity on Binance experienced a sharp decline. XRP/USDT turnover fell from 252.45 million USDT on October 8 to just 54.12 million USDT on October 10 – a decrease of approximately 78.6%. This raises concerns about the strength of the price rebound, as it lacks substantial support from spot buyers.

Open Interest and Funding Rates Shift

Open interest, which measures outstanding contracts, decreased initially before beginning to recover. Between October 8 and 9, Binance XRPUSDT open interest fell by 8.1%, while Bybit saw a 6.6% decline. However, by October 11, both exchanges showed an increase in open interest, though levels remained below those seen on October 8.

Funding rates, the periodic payments between long and short positions, also shifted. After being negative on October 9, indicating shorts were paying longs, rates turned positive on Binance and Bybit by October 10, suggesting a renewed carrying cost for long positions. This shift signals changing conditions for futures holders.

Spot Market Weakness Raises Questions

The decline in spot volume is particularly noteworthy. Buyer-initiated trades accounted for 51.8% of XRP volume on Binance spot on October 9, but fell to 43.1% on October 10. This, combined with the falling turnover, suggests a lack of sustained buying pressure in the spot market, potentially limiting the upside for XRP.

Source: CryptoSlate