XRP Hits $1 Liquidity Pocket as $400M Open Interest Surge Raises Risk

XRP has now moved close to a major liquidity zone around $1 as open interest and funding rates continue to rise, raising downside risk.

Prominent crypto analyst CryptoInsightUK called attention to this structure and warned that heavy liquidity alongside growing leverage could lead to a sharp move in either direction.

Notably, bears have focused on this area for months, but XRP’s behavior after reaching it has made the next move difficult to predict.

XRP Reaches the Liquidity Zone Bears Have Targeted

CryptoInsightUK has followed the liquidity pocket around $1 for several months and has repeatedly pointed to the area as the main level drawing XRP lower. 

The analyst opened a large short position between $1.08 and $1.10 in July and kept it even after XRP nearly reached $1.18. He continued to expect XRP to sweep the large amount of resting orders around the psychological $1 level.

Most recently, XRP dropped to a low of $1.0015, just shy of the $1 mark, but CryptoInsightUK believes the liquidity sweep is already taking place. 

The analyst considers this the only truly large liquidity pocket on the chart, while smaller liquidity clusters remain above the current price. XRP has entered the zone but has not moved deeply into it, meaning further downside remains possible.

Market Recording Weak Volume

Meanwhile, trading volume has remained low across major exchanges, including Binance and Coinbase, despite XRP dropping close to $1, a level that traders have watched for weeks. 

CryptoInsightUK pointed out that neither side has shown much conviction. Short sellers have not stepped in strongly enough to push XRP below $1, while buyers have also failed to provide strong support around the level.

In a more typical setup, short sellers would increase their positions around support in an attempt to trigger liquidations below it, while long traders would add positions to defend the area. 

This has not happened in a meaningful way here. Also, low spot volume suggests that leverage, not strong spot buying, has played a major role in XRP’s move into the liquidity zone.

XRP Open Interest Jumps Nearly $400 Million

Speaking further, CryptoInsightUK confirmed that the massive rise in open interest since XRP traded around $1.06 has become his main concern. 

Specifically, leveraged exposure measured in XRP has risen by 29%, adding about 188 million XRP to open contracts. Dollar-denominated open interest has also increased by roughly $166 million.

In total, open interest has grown by nearly $400 million over the past week. This increase has pushed overall positioning back toward the levels seen during the October 10, 2025 liquidation event. 

Previous major open-interest declines on XRP have occurred alongside price drops of 30% to 43% in open contract value. CryptoInsightUK sees these events as signs that large sell-off candles could follow.

Positive Funding Could Increase Downside Risk

Meanwhile, funding rates remain positive, suggesting that many of the new leveraged positions favor longs. If XRP turns lower, those positions could face liquidation and add more selling pressure. 

The market analyst called attention to the risk of a sharp downside wick toward $0.97, with $0.93 and even $0.85 possible on the daily chart if selling becomes more aggressive.

He sees two main outcomes after XRP completes the liquidity sweep. First, the price could make a sharp move lower similar to the Oct. 10 event, form a major low and then recover. On the other hand, buyers could step in unexpectedly and send XRP higher from the current area.

XRP Weekly RSI Hits Historical Cycle Lows

CryptoInsightUK currently favors the downside scenario because XRP has reached the liquidity zone while open interest has climbed without a matching increase in spot buying. 

This does not provide strong evidence of genuine accumulation. The analyst has therefore kept the short position open while watching $0.97 as a major level for determining whether sellers remain in control or a relief rally begins.

However, XRP’s weekly RSI gives bulls a reason for optimism. The indicator has moved close to historical cycle lows, and previous cycles have shown weekly RSI reach oversold levels before forming a higher low and starting a recovery. This pattern could support a bounce and makes the bearish outlook less certain.