Diminished Demand for XRP Traders: Market Insights

XRP is currently facing significant downward pressure as both derivatives activity and onchain positioning weaken throughout December. These indicators suggest a market that remains hesitant, despite XRP trading near critical technical support around $2.00.

Key Findings:

Since July, XRP futures taker buy volume on Binance has plunged by 95.7%, signaling a drop in demand.
The Estimated Leverage Ratio (ELR) for XRP has reduced to 0.18, indicating large-scale deleveraging and diminished speculative risk.
Cumulative volume deltas for retail, medium, and large wallets all show selling pressure through December.

XRP one-day chart. Source: Cointelegraph/TradingView

XRP Futures Demand Declines as Liquidity Shrinks

Data from CryptoQuant reveals that XRP’s futures taker buy volume peaked at over $5.8 billion in July but has now dropped to approximately $250 million, marking a 96% decrease. This stark reduction not only highlights a lack of buying pressure for XRP but also reflects broader trends within the altcoin market.

XRP ledger taker buys volume on Binance. Source: CryptoQuant

The taker buy-sell ratio has remained negative during this period, indicating that sellers have consistently outnumbered buyers in the XRP derivatives market. Despite previously optimistic sentiments surrounding ETFs, there has been a notable absence of sustained buying activity.

XRP Leveraged Positions Return Amid Market Risk Reduction

Binance’s data shows XRP’s ELR has fallen to 0.18—one of the lowest levels in the current market cycle—coinciding with XRP’s price decrease from above $3.00 to around $2.00. This reduction suggests that traders are actively closing or reducing leveraged positions in response to the extended market downturn.

XRP ledger estimated leverage ratio. Source: CryptoQuant

While a decrease in leverage can mitigate risks of cascading liquidations, it also indicates weak speculative interest among traders, marking unstable periods in which markets may shift direction before establishing a clear trend.

Profit-Taking and Wallet Analysis Reveal Weak Demand

Glassnode senior researcher CryptoVizArt reported a significant transaction on December 11, wherein a 5- to 7-year-old XRP wallet, which had a cost basis of $0.40, realized over $721.5 million in profit during a selling event at the $2.00 mark.

Data from Hyblock Capital confirmed a pervasive bearish sentiment. December’s cumulative volume delta for XRP demonstrates negative outcomes across all wallet categories, with retail wallets ($0–$10,000) at -$8.68 million, mid-sized wallets ($10,000–$100,000) at -$6.89 million, and large wallets ($100,000–$10 million) at -$34 million. This data illustrates persistent net selling without any segment showing sustained buying activity.

XRP four-hour chart volume delta cumulative. Source: Hyblock Capital

In summary, XRP is currently navigating a period of low demand and minimal leverage, with indications that consolidation or further decline is likely unless liquidity conditions significantly improve.

This article does not contain investment advice or recommendations. All investments and trading carries risk and readers must do their own research when making decisions.