XRP is trading back above $1.40, with analysts pointing to a combination of bullish developments, including its Middle East expansion and a partnership with OKX. However, the most compelling narrative revolves around derivatives data, which suggests that the market's calm exterior is hiding a coiled spring that could hurt short sellers.
A CryptoQuant analysis highlights a sharp divergence between XRP's estimated leverage ratio on Binance and its current price level. The leverage ratio has collapsed to approximately 0.1, a level last seen in late October 2024 when XRP was trading around $0.50. Although today's price is nearly three times that, the patterns could repeat. The last time a similar divergence resolved to the upside, between late June and mid-July 2025, XRP surged from $1.96 to $3.65 as the leverage ratio climbed from below 0.3 to under 0.6 over four weeks.
XRP market sentiment shifted notably after new data revealed a growing imbalance between trader positioning and available supply across major exchanges. According to CryptoQuant analyst Amr Taha, leveraged exposure is increasing rapidly, particularly on Bybit, even as XRP reserves on exchanges continue to decline. This evolving structure has drawn significant attention, as it reflects tightening liquidity conditions while price attempts to stabilize above key resistance levels.
Open interest delta turned positive during the recent price increase, signaling that new positions are entering the market. Bybit recorded a surge of approximately $23.9 million on May 1, while Binance posted a comparatively smaller increase of around $2.7 million during the same period. At the same time, exchange reserve data shows a steady decline in XRP holdings across major platforms. Binance reserves dropped from about 2.80 billion XRP in mid-March to nearly 2.76 billion XRP by early May, a reduction of approximately 50 million XRP. Bybit recorded a much sharper decline, with holdings falling from roughly 117 million XRP to about 98 million XRP within the same timeframe, representing a decrease of more than 16 percent.
If leverage begins rebuilding as fresh capital enters, it could drive XRP toward the $2.00 psychological level and potentially retrace toward the mid-2025 highs near $3.65. Conversely, if price collapses to match the low-leverage environment, a flush back toward the $1.00–$1.10 area would technically resolve the divergence without a squeeze. Analysts caution that passive short exposure carries asymmetric risk, as a leverage rebuild could be fast and violent.
