XRP Traders Caught in Coiled Spring as Accumulation Grows Amid Bearish Bets

XRP has been trading within a 'hidden coiled spring,' according to CryptoQuant analyst CryptoOnChain, as short positions and spot accumulation grow. The asset has dropped nearly 14% this month due to the broader selloff led by Bitcoin.

At $1.14, XRP faces selling pressure from bearish bets, but CryptoOnChain notes that open interest has grown to 494 million, with an estimated leverage ratio on the rise. This increase suggests strong speculation despite price weakness.

Moreover, much of this leverage is coming from traders expecting further losses, as Binance funding rates have moved into negative territory. Meanwhile, activity in the spot market appears to be moving in the opposite direction, with large investors withdrawing XRP from exchanges.

CryptoOnChain argues that when high open interest combines with deeply negative funding rates and large exchange withdrawals, conditions become favorable for a short squeeze. The analyst acknowledges that XRP could still face additional downside but notes that continued reduction of exchange supply suggests larger market participants may be accumulating.