Ripple's XRP has largely fallen out of favor with retail traders, but the asset has become an increasingly contested arena for whales and professional derivative traders. Over the past week, open interest recovered by roughly 30% as bearish derivative positions clashed with bullish whale buyers.

According to derivatives data, XRP open interest climbed from $1B to approximately $1.3B within the span of a week, a rapid rebound after the latest market downturn. Open interest tracks the total value of outstanding derivative contracts, so a rebound of that size reflects renewed leveraged involvement rather than spot buying. The token traded near $1.32 after bouncing alongside the rest of the market, and it has moved within a relatively narrow range that has left retail participants largely on the sidelines.

Whales and derivative traders now dominate trading, producing regular price swings and significant liquidations. XRP also stands at a strong price point, though it is not yet in the overbought zone based on the RSI index, a momentum gauge used to flag when an asset is stretched in either direction. That positioning has drawn attempts to short the asset, with local accumulation of short positions forming on selected exchanges.

Institutional and ETF demand lag as insiders drive exposure

The rise in XRP open interest is driven mostly by crypto insiders. On the CME Group market, XRP derivative trading slowed down over the past week. Demand from ETFs is also relatively weak, with ETF holders carrying around $440M in unrealized losses, indicating those positions were established at prices above current levels. Spot ETFs give conventional portfolios a way to hold XRP without exchange accounts, and a revival of that demand would broaden participation beyond crypto insiders.

Short buildup concentrates on Binance, Bybit and Bitfinex

Binance and Bybit posted significant growth in XRP open interest, displacing the recent accumulation of trades on Hyperliquid. Binance carries $542.7M in open interest, an increase of around 2.4% over the past day. As of November 5, Binance also showed a rapid buildup of short positions, far surpassing the growth of long positions.

XRP trading has also accelerated since the Binance hack, as the asset is part of the hacker's portfolio. The XRP taken in the hack has yet to appear on the market, and Ripple has announced the tokens cannot be frozen. Because the XRP Ledger is a public blockchain, any movement of those tokens would be observable, keeping the hacker's wallets on traders' watch lists.

Positioning trackers have additionally noted a spike in XRP open interest on Bitfinex, an exchange that serves as a venue for fast buildups and liquidations of XRP short positions.

The prevalence of short positions suggests the XRP rally above $1.30 is expected to break down soon. Conversely, the short positions may trigger a squeeze that liquidates positions up to $1.35, according to liquidation heat map data. Squeezes unfold mechanically as rising prices force leveraged shorts to buy back tokens to exit, with exchanges auto-closing positions once margin requirements fail. Even with a short squeeze, XRP may remain range-bound, serving as a speculative token for short-term price swings.

Whales keep buying as XRP remains resilient

XRP has proven relatively resilient to recent turbulence, including the Binance hack. The asset was also unaffected by the recent bug discovery on the XRP Ledger network, which may have allowed unlimited token minting.

Whale withdrawals are closely watched because they shrink the immediately available supply on Binance; analysts treat exchange reserve levels as a proxy for supply that can be sold at short notice. As of November 1, around 50M XRP had been withdrawn from the exchange, based on CryptoQuant analysis. Over time, around 68% of the XRP supply is held in whale wallets, as professional traders and large-scale holders have absorbed selling from retail owners.

XRP was also withdrawn from Gate and Upbit, with 54M tokens leaving the exchanges for self-custodial wallets. Exchange outflows continued to expand as of November 5, with 13.24M XRP leaving centralized markets.

For now, self-controlled XRP holdings have limited utility. Trading in the asset is minimal on decentralized exchanges, and Ripple's XRP Ledger still holds limited liquidity compared with other DeFi networks. The primary effect of whale holdings is to contract the available supply.

Analysis based on demand signals and derivative open interest suggests the asset may have found its local bottom. While crypto remains unpredictable, XRP is seen as potentially breaking out to a higher range after months of relative stagnation.