XRP leverage ratio echoes its 2024 pre-rally reset
XRP traders are cutting leverage fast. The same thing happened before the token’s sharp rally in late 2024. My read: the resemblance matters, but it does not promise the same result.
On Binance, XRP’s estimated leverage ratio, or ELR, has dropped to 0.16, one of its lowest readings since November 2024. The ratio compares futures open interest with the exchange’s XRP reserves. In plain English, it shows how much traders are borrowing to bet on price moves; a lower reading usually means fewer leveraged positions. The current figure sits barely above the April 2026 low of 0.15, recorded during an earlier XRP correction. And this correction? Brutal. XRP trades near $1.10, roughly 70% below its 2025 high of $3.60.
The drop in ELR mostly means traders are closing leveraged futures positions. It does not necessarily mean spot investors have sold their XRP. That distinction matters. As the price fell, exchanges forced overstretched trades to close, dragging open interest lower. Binance now holds about $375 million in XRP open interest, far below its highs during the past year. Why does this matter? Because one liquidation is less likely to knock prices lower, force another trade to close, then start a cascade. Most market commentary treats falling leverage as automatically bullish. That is only half right. It removes some danger; it does not create buyers. Things are calmer now. Calmer does not mean bullish. Still, the derivatives data shows that much of the speculative excess has disappeared.
The setup resembles mid-2024. XRP traded near $0.40 while its ELR gradually fell to about 0.05, the cycle low. Its price then went sideways for months as traders unwound leveraged bets. The waiting felt endless. It also gave the market time to settle before buyers came back. XRP eventually rose more than 790%, passing $3.60 as leverage increased with the price. Repeat that gain from today’s $1.10, and XRP would reach roughly $9.80. I’ll be honest: that number is seductive. It is also simple arithmetic, not a prediction. Markets rarely repeat themselves with that kind of precision. Standard Chartered expects a smaller move. The bank recently lowered its year-end 2026 XRP target from $8 to $2.80, though it retained its 2030 target of $28.
Large holders have been buying as well. Wallets holding between 100 million and 1 billion XRP added about 1.3 billion tokens over 48 hours in early March 2026, according to on-chain data. Some coins seem to have moved off exchanges and into cold wallets, making an immediate sale less likely. On March 10 alone, investors sent roughly $738 million in XRP to cold storage, one of the largest daily exchange outflows of the year. Then the pace accelerated: in April, the biggest holders acquired more than 11 million XRP a day, their fastest pace in about 10 months. It was still happening in July. Coinbase withdrawals above 1 million XRP increased from about 10% of withdrawals on June 16 to 25.7% by July 1. More than 90% of XRP leaving exchanges now goes to private wallets associated with large holders rather than back to trading platforms.
Does that prove whales expect a rally? No. These investors may intend to hold, though wallet activity cannot tell us exactly what they plan to do. Comparable outflows have come before BTC and ETH price gains. Counter to the usual advice, however, exchange withdrawals are not a clean buy signal. Sometimes no rally follows. To me, the flow data is supportive—not decisive.
What this means
XRP’s derivatives market has lost much of the leverage that left it open to cascading liquidations. Meanwhile, large holders are moving coins off exchanges. That is the reset. The combination resembles the reset before the late-2024 rally, but I would not treat it as proof that another surge is coming. Yes, that sounds cautious after laying out the bullish parallels. It should. XRP is less exposed to forced selling than it was when speculative trades were crowded, while the cold-wallet transfers are mildly encouraging. Major holders appear more willing to sit on their XRP than sell it quickly.
Watch the next move. Specifically, keep an eye on whether the ELR remains below 0.20 and large exchange outflows persist. If they do, leverage is probably staying under control while big holders continue to accumulate. The price still has work to do. XRP faces resistance near $1.50, and a firm break above it could restore some momentum. Is the derivatives reset enough by itself? Not remotely. Ripple’s legal and regulatory situation is another risk, and a major ruling or policy change could easily outweigh the technical picture. Over the next few months, we should get a better sense of whether this was a real reset or merely a pause in a longer decline.