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XRP Drops 5% as Leverage Hits a Seven-Month High—but ETF Demand Holds

By Isaac • August 26, 2026 7:16 am • Comments

XRP is finally cooling off after one of the sharpest rallies in the crypto market—and the pullback is exposing how quickly leverage piled back in.

The token traded near $1.44 early Wednesday, down roughly 5% over 24 hours after briefly pushing above $1.50. Even after that drop, XRP remained up about 44% for the week.

That is the tension now sitting under the market: the larger move still looks powerful, but the short-term trade has become crowded enough that an ordinary round of profit-taking can turn violent.

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CCN reports that XRP’s estimated leverage ratio on Binance has climbed to its highest level in more than seven months. The ratio compares futures open interest with the amount of XRP held on the exchange, so a rising reading means traders are taking on more leveraged exposure relative to available inventory.

The move arrived after XRP rebounded from around $1 in mid-August and briefly traded above $1.50. Futures open interest reached about $3.45 billion, while Binance showed roughly two long accounts for every short and an even wider long bias among top traders.

At the same time, futures volume climbed to roughly $6.4 billion in 24 hours—more than five times the approximately $1.2 billion traded on spot markets. That mix leaves derivatives, not ordinary spot buying, in control of much of the immediate price action.

Rising leverage is not automatically bearish. When price and open interest climb together, it can show real confidence and new positions entering the market.

But leverage changes character when price stops rising.

The derivatives market is now driving the short-term action.

XRP futures generated about $6.4 billion in 24-hour volume, according to the report, compared with roughly $1.2 billion on spot markets. That means leveraged contracts were changing hands at more than five times the pace of straightforward XRP purchases.

The imbalance matters because futures can amplify a move in either direction. Leveraged buyers helped push XRP higher as shorts were forced to cover.

Once the token failed to hold above $1.50, late long positions became potential forced sellers.

About $18.9 million in XRP positions were liquidated over the previous day, including approximately $15 million in long positions. Binance positioning was also heavily tilted toward buyers, with about two long accounts for every short account and an even wider long bias among top traders.

Kraken’s live XRP futures market underscores why that distinction matters. Its XRP perpetual contract showed a $1.48 mark price, 10.7 million XRP in open interest worth about $15.8 million, and more than $52 million in 24-hour volume when the market page was updated late August 25.

The contract permits leverage as high as 50 times posted capital. That can turn a relatively small price move into a much larger gain or loss for the trader, while open interest measures how much exposure remains outstanding rather than how much XRP has been bought outright.

Funding was nearly flat on that specific contract, showing that leverage itself is not proof of a one-way bet. The risk comes from the wider combination of elevated open interest, a heavily long account ratio, fading momentum, and futures volume overwhelming spot turnover.

When those conditions meet, traders who entered late have less room to wait out a decline. Forced exits can push the price lower even when the longer-term investment story has not materially changed.

ETF buyers have not left.

The most encouraging part of the pullback is what has not happened. U.S. spot XRP ETFs recorded another $23.87 million in net inflows on August 25, extending their streak to nine consecutive trading sessions.

Cumulative inflows reached roughly $1.59 billion.

That does not guarantee the price will hold. ETF demand can be overwhelmed in the short run when a crowded derivatives trade begins unwinding.

But it does separate the current decline from a clean collapse in institutional interest. Regulated investment products are still taking in money even as leveraged traders absorb losses.

XRP’s immediate test is the $1.40 area. If the token stabilizes while open interest and leverage cool, this pullback could leave the market on firmer footing.

A break below that zone while long positioning remains elevated would expose another layer of traders to forced liquidation.

On the upside, reclaiming the $1.50 to $1.55 range would show that buyers are absorbing the supply that stopped the latest advance.

After a 44% weekly run, some profit-taking was inevitable. The bigger question is whether XRP can shed the hottest leverage without losing the steady ETF demand underneath it.

For now, the answer is still open—and that makes the next move more consequential than Wednesday’s 5% dip alone.

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