XRP Flashes Signal Seen Before 72% Rally as Binance Leverage Falls

XRP Signal Echoes Setup Before Previous Rallies

XRP could be developing conditions for a short-term rebound as leveraged exposure contracted on Binance, Cryptoquant contributor Darkfost said in findings reported Oct. 27. The analyst’s XRP deleveraging signal echoed episodes that preceded past substantial gains, placing the latest contraction within a pattern he considered favorable for recovery.

Binance XRP open interest had dropped to approximately $445 million, below its 180-day average of roughly $460 million. Since Sept. 22, the dollar value of outstanding positions had fallen nearly 28%, while XRP’s price declined 17% over the same period. XRP traded at $1.31 on Oct. 28, one day after the analysis appeared.

The analyst stated:

“This deleveraging dynamic is a rather positive signal as it suggests that pressure on XRP futures is gradually easing.”

The accompanying chart compares XRP’s price with Binance open interest and its 180-day moving average, highlighting deleveraging episodes.

Price Losses and Liquidations Drove the Contraction

Part of the contraction reflected XRP’s declining price, which reduced the dollar value of existing derivatives positions even before accounting for closures. The analysis also attributed some of the reduction to liquidations triggered during the sell-off, when losing positions were forcibly closed.

A decline in outstanding futures positions can indicate that a prevailing price trend is losing strength, CME Group states. However, the dollar value of open interest also changes with the underlying asset’s price, making valuation effects relevant when assessing the scale of a derivatives unwind.

Losses on leveraged perpetual futures contracts can intensify during a sell-off, increasing the risk of forced closures as collateral becomes insufficient. Those liquidations contributed to the contraction, alongside the mechanical effect of XRP’s lower price on the value of existing exposure.

Earlier Resets Frame the Rebound Comparison

Several earlier indicators documented changing XRP positioning during 2026, although they measured different aspects of the market. A decline in Binance’s estimated leverage ratio to approximately 0.17 was recorded in March, down from levels near 0.6 previously. That ratio incorporated exchange reserves, unlike the dollar-denominated open-interest series underlying the latest signal.

A separate September analysis found Binance XRP open interest fell about 32% between Aug. 22 and Sept. 17, while the price of XRP lost roughly 11% in the same span. That assessment also identified aggressive selling across spot and perpetual markets, showing that reduced derivatives exposure coincided with continued selling.

Exchange balances also shifted over a longer period, with Binance’s monthly average XRP reserves declining from approximately 3.1 billion tokens in November 2025 to 2.6 billion by early September. The reserve assessment concerned tokens held on the platform, providing separate context on exchange balances.

Darkfost tied the latest deleveraging to earlier rebounds, writing: “When this happens, it tends to stabilize the asset and helps put in place some of the conditions that favor a potential short-term rebound.” He added:

“We saw this in mid-September, when XRP gained 32% in the following period, and after the mid-August episode, which was followed by a 72% rally.”