All in on XRP! As OI hits an ATH and leverage hits the roof, what’s next?

Key takeaways

XRP has surged nearly 25% this week, driven by record-high Open Interest and rising Funding Rates, pointing to strong speculative activity. However, the market could face sharp swings if sentiment shifts.

Ripple [XRP] has jumped nearly 25% this week, catching the market’s attention once again. Open Interest in its derivatives market has hit an ATH, showing a surge in leveraged bets and growing excitement.

But the big question is whether this rally is built on real investor confidence — or just hype that could lead to sharp price swings.

Source: CoinMarketCap

XRP OI hits all-time high as speculation surges

XRP’s derivatives market is showing explosive growth, with Open Interest soaring past $10 billion across major exchanges for the first time ever.

The sharp uptick (visible in the latest data from CoinGlass), is a new high in trader participation and brings in a wave of leveraged speculation pouring into the asset.

Source: CoinGlass

This surge in Open Interest has outpaced previous cycles, even those during XRP’s last major rallies, indicating a potentially overheated market.

While rising OI can fuel further gains, it also raises the risk of sudden liquidations and heightened volatility if sentiment shifts abruptly.

Funding Rates point to overheated longs

XRP’s aggregated Funding Rate has climbed sharply in recent days, peaking above 0.06% before cooling slightly to 0.0302.

This surge shows that a majority of traders are aggressively opening long positions, betting on further price gains. Elevated Funding Rates often reflect market euphoria; but they also come with a warning.

Source: Coinalyze

When rates climb too high, it becomes expensive to hold leveraged longs, increasing the risk of forced liquidations during pullbacks.

While bullish sentiment dominates, the current funding levels suggest the market may be overstretched and vulnerable to rapid reversals.

XRP: Liquidation clusters suggest key risk zones ahead

The Binance XRP/USDT liquidation heatmap reveals dense liquidation clusters between $3.30 and $3.60; levels where many traders have taken on high leverage.

Source: CoinGlass

As XRP’s price surged past these zones, aggressive short liquidations likely fueled the rally.

However, the chart also highlights that current price levels are surrounded by thin liquidity pockets, meaning any sharp move — especially downward — could trigger cascading liquidations.

With Funding Rates elevated and Open Interest at record highs, XRP’s market is walking a tightrope.

If momentum stalls, even a modest dip could force leveraged positions to unwind rapidly, adding fuel to downside volatility.