XRP is currently exhibiting characteristics of a “coiled spring,” as a surge in short positions coincides with significant spot accumulation by long-term holders.
Following a broader market selloff led by Bitcoin, XRP has declined nearly 14% this month, with its current price hovering around $1.14. Despite this downward trend, emerging market data suggests that strategic investors are quietly building positions even as speculators bet on further declines.
Increased Selling Pressure and Bearish Speculation
CryptoQuant analyst CryptoOnChain recently highlighted signs that XRP may be preparing for a significant price movement. The asset recently dipped to approximately $1.09, its lowest point in six months, a slump that also saw total network transaction counts drop by 25% month-over-month.
However, derivatives data indicates a spike in market interest. Open Interest has climbed to 494 million, and the Estimated Leverage Ratio continues to rise, signaling that traders are utilizing higher leverage to speculate on the asset’s direction.
A significant portion of this leverage is skewed toward the bearish side. Binance Funding Rates have shifted into negative territory, averaging -0.006 after a week-over-week drop of more than 550%. This indicates that a vast number of traders are aggressively shorting XRP as it tests local lows.
Spot Accumulation Signals a Potential Short Squeeze
While the futures market remains pessimistic, the spot market shows a contrasting trend. CryptoOnChain noted that large-scale investors are moving XRP off exchanges, reducing the available liquid supply.
Data indicates that Binance saw nearly 90 million XRP in net outflows on June 10, with withdrawals vastly outpacing deposits. Monthly outflows from Binance have jumped by more than 83%, suggesting that whales are accumulating the asset for the long term while retail traders continue to increase their short exposure.
According to the analyst, the combination of high Open Interest, deeply negative funding rates, and massive exchange withdrawals often creates the ideal conditions for a “short squeeze,” which could trigger a rapid price spike as short sellers are forced to cover their positions.
While further downside remains a possibility, the steady reduction of exchange supply suggests that institutional participants are absorbing the selling pressure.
Key Technical Levels to Watch
In a separate technical analysis, market commentator EGRAG observed that XRP is currently moving sideways above its short-term moving average. He noted that buyers maintain control on lower timeframes as long as the price holds the support zone between $1.1340 and $1.1408.
The first major resistance level is identified at $1.1938. A successful break above this point could propel XRP toward a second target of $1.26.
On the downside, the primary support level sits at $1.09, with $1.05 acting as a critical invalidation point. A failure to hold the current support zone would likely lead to a retest of the $1.09 level, whereas a breakout from the current consolidation range could clear the path for a move toward $1.1938.