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$XRP is seeing growing activity in the derivatives market despite recent price weakness.
The development suggests it could be setting up for a reversal once bearish sentiment reaches an extreme. The token is trading at $1.05, up 2.45% over the past 24 hours.
However, $XRP is still down 8% over the past week and has fallen 43% since the start of the year, reflecting broader weakness across the crypto market.
Open Interest Rises as Price Declines
$XRP’s open interest has continued to rise even as its price trends lower. Over the past day, $XRP open interest rose by 1.13%, reaching $2.37 billion. This figure suggests traders are opening new leveraged positions during the decline. Notably, open interest options dipped 67% to $21.66 million while options volume surged 16% to $5.4 million.
$XRP | CoinGlass
The accompanying chart shows $XRP futures open interest steadily increasing over recent months. Meanwhile, the token has continued to post lower highs and lower lows.
Funding rates have also turned negative. This means short traders are paying long traders to keep their positions open, a sign that bearish sentiment is becoming more dominant in the perpetual futures market.
Negative Funding Could Support a Rebound
Rising open interest and negative funding are creating conditions that may support a potential reversal. The market appears to be “charging up for a reversal,” one analyst observed. However, buyers may need to regain momentum before bulls can take control.
Negative funding rates can sometimes precede sharp rallies. If the price suddenly rebounds, heavily leveraged short positions may be forced to close, triggering a short squeeze that pushes prices even higher.
Possible Sweep to $0.95
Despite the longer-term bullish outlook, $XRP could first revisit $0.95. Many market watchers, including Ali Martinez, have forecast a fall to this level and even lower.
The idea is that the market may target liquidity below current prices before reversing. Such liquidity sweeps happen when the price briefly moves into areas with large clusters of stop-loss orders. This can flush out excess leverage before a new trend begins.
If buyers step in after that move and overall sentiment improves, $XRP could be positioned for a stronger recovery.
The Case for Deeper Bear Markets
Notably, $XRP is down about 69% from its July 2025 peak of $3.66. While significant, this decline is milder than past bear markets, which saw drops of 85%–96%, such as in the 2013–2014 and 2018–2020 cycles.
If $XRP matched its worst historical drop (96%), the price could fall near $0.15, about 87% below current levels. Ali Martinez recently floated this target as a possibility, which would place $XRP at a level last seen in 2017.
Regardless of how low the coin may go, many believe buying $XRP under $1 offers significant opportunity for the next bull run.
