The cryptocurrency market has turned extremely bearish, and the price of XRP has fallen sharply and is approaching the $1.30 level. Following a market analysis, an analyst has identified a growing number of warning signs emerging across the market, suggesting that it may be time to prepare for a potential sell-off.
It’s Time To Plan XRP Exit Strategy
As the price of XRP shifts into a downward trend, many metrics have turned bearish, raising the possibility of a deeper and broader pullback for the altcoin. According to recent observations from CW, a crypto expert and verified author at CryptoQuant, the altcoin is flashing warning signals on-chain that point to selling opportunities.
For assets like XRP, these signals are viewed as early indicators that the market may be approaching a stage where risk outweighs profit. CW’s analysis is based on recent signals from the XRP Ledger Spot Average Order Size metric.
The expert highlighted that spot order has been driven by large investors or whales since 2020. This setup underscores how large holders typically influence market direction, and they do so for a long time. Meanwhile, the periods when retail investors have led the market were extremely short.
However, the analyst claims that once the cycle jumps to peak levels, retail investors will eventually take control of the market and lead the order. As a result, investors are being urged by the expert to stay alert and start gearing up for a potential sell-off if conditions continue to deteriorate.
In another X post, CW reported a drop in the XRP Ledger Estimated Leverage Ratio, particularly on Binance, the largest cryptocurrency exchange in the world. Looking at the chart, the metric has now fallen to the 0.14 level, which implies that all investors using leverage have been liquidated.
Generally, when the leverage ratio hits a low point, this often marks the bottom for the altcoin. Meanwhile, the current leverage ratio has dropped to levels not seen since November 2024. During the period, the price of XRP was trading at the $0.9 mark.
A Major Drop In The Altcoin’s Open Interest
Amid this bearish period, a sharp shift is emerging in the derivatives market for XRP. Another crypto analyst, Xaif Crypto, has published on X that the Open Interest (OI) has recently experienced a significant decline, indicating that a substantial number of leverage positions have been liquidated.
This development points to a cool-off in speculative activity before the next major move takes shape. Data shows that XRP’s open interest is down by 75% from its peak. Such a drop in open interest may indicate a short-term weakening of participation or open the door to a more sustained buildup.
As seen on the chart, open interest on Binance appears to be holding up better than other trading platforms, but the leading exchange cannot hide what is unfolding underneath. Leverage is leaving the market alongside the absence of conviction among investors.
Featured image from Pngtree, chart from Tradingview.com
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