After a promising start to the year, the price of XRP has erased much of its early gains, currently trading around $1.88 amid broader weakness in the crypto sector. According to BeInCrypto Markets data, although the asset surged 27% in the first days of January 2026, the momentum quickly faded, forcing a significant price correction.
This downward trend has triggered a collapse in open interest within the XRP derivatives market, which has fallen below the $500 million threshold on the Binance platform. According to analyst Darkfost, this level of deleveraging has not been seen since the massive liquidation event on October 10, indicating a deep cleanup of the market system.
Such structural resets, far from being purely negative, often precede bullish recovery phases by flushing out the excess speculative leverage that artificially inflates prices. Likewise, the contraction of liquidity in derivatives suggests that the market is reaching a healthier equilibrium point, setting the stage for a potential rally once investor interest gradually returns to the space.
Accumulation and technical signals amidst current market volatility
Despite the prevailing selling pressure, various on-chain metrics indicate that long-term holders have increased their buying activity by taking advantage of the lower prices. The “Liveliness” metric has shown a notable decline, which confirms sustained accumulation by strategic investors, thereby reducing the available supply and the immediate exit pressure on major cryptocurrency exchanges.
On the other hand, the Relative Strength Index (RSI) has begun to recover after dropping into oversold territory below 30 points. This situation, combined with the formation of a descending wedge pattern on daily charts, is typically interpreted as an indicator of exhausted downward momentum, which could lead to an upward breakout if trading volume supports the move.
Is the current accumulation enough to reverse the negative trend of the last few weeks?
However, headwinds persist, as XRP reserves on platforms like Binance and Upbit have grown to represent nearly 10% of the total circulating supply. This increase in exchange balances poses the risk of further liquidations, meaning that Ripple’s underlying technology and institutional adoption will be fundamental to sustaining any robust recovery attempt in the near term.
Finally, the coming weeks will be decisive in defining whether the deleveraging phase has sufficiently cleared the XRP derivatives market to allow for a new growth cycle. Meanwhile, traders are closely watching the $1.80 support zone as the last bastion before considering much deeper correction scenarios within the current challenging macroeconomic environment.
