The total XRP futures open interest has fallen by 37% since peaking on January 15, indicating a significant reduction in demand for XRP futures contracts.
However, this decline does not necessarily signal bearish sentiment, as derivatives markets always match long and short positions.
Price Correction and Support
XRP experienced a 25.7% correction over seven days ending February 6 but found strong support at $2.30.
An 8% daily gain on February 7 pushed XRP to $2.50, though professional traders have reduced leveraged positions, indicating caution despite the price increase.
Futures Premium
The premium on monthly futures contracts reclaimed the 5% neutral threshold after a flash crash to $1.76 on February 3.
The annualized premium has returned to a bullish 10%, suggesting institutional interest, even as XRP trades 25.5% below its all-time high of $3.40.
Funding Rate
The XRP perpetual contracts funding rate is at 0.2% per month, nearing bearish territory. This reflects a lack of optimism among retail traders, despite improving from February 3 levels. It remains significantly lower than the 0.9% recorded two weeks ago.
Market Sentiment
Institutional interest in XRP remains evident from the bullish futures premium, but retail traders show less optimism.
XRP’s price movements are often influenced by unverified news and rumors, such as claims about Ripple CEO Brad Garlinghouse joining a potential Trump administration cryptocurrency council or traditional banks integrating with the Ripple network.
These claims lack credible evidence, and XRP remains highly speculative with less than $100 million in total value locked (TVL).
Legal and Regulatory Considerations
XRP may retest the $3 level due to a more crypto-friendly government, which could benefit Ripple’s ongoing legal cases.
However, the primary legal issue—the SEC lawsuit over unregistered securities offerings—is in the appeals stage, and its outcome is unlikely to significantly impact XRP adoption or its public ledger network.
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