Key Takeaways:
XRP gained 2.1% to trade at $1.4040 as of 06:37 UTC, but a sharp divergence in its derivatives data suggests a far more volatile move may be imminent. The estimated leverage ratio for XRP on Binance has collapsed to just 0.1, a level that has historically preceded explosive price rallies and could trigger a short squeeze.
"A CryptoQuant analysis highlights a sharp divergence between XRP’s estimated leverage ratio on Binance and its current price level," an analyst report noted. The report points out that speculative positioning has been flushed out, creating an environment where a rebuild in leverage could have an outsized price impact.
The ratio’s collapse to 0.1 marks a return to levels last seen in late October 2024 when XRP was trading around $0.50. The last time a similar divergence resolved to the upside, between late June and mid-July 2025, XRP surged from $1.96 to $3.65 as the leverage ratio climbed from below 0.3 to just under 0.6 over four weeks, according to derivatives data.
For traders, the setup presents an asymmetric risk, particularly for passive short exposure. Should fresh capital drive the leverage ratio higher, a rapid move toward the $2.00 psychological level and a potential retest of the mid-2025 highs near $3.65 is possible. Conversely, a price collapse toward the $1.00–$1.10 support area would also resolve the divergence, but to the downside.
The conditions for a potential squeeze in XRP are not occurring in isolation. The broader cryptocurrency market is flashing similar signals, led by Bitcoin’s push toward $80,000. Over the past 24 hours, total crypto liquidations reached $370 million, with $301.93 million of that total coming from short positions, according to CoinGlass data. Bitcoin alone accounted for $179 million of the short liquidations.
This marks the second major squeeze in two weeks and points to a structural pattern where bearish positioning is repeatedly caught offside. Open interest in derivatives for Bitcoin, Ether (ETH), and Zcash (ZEC) has climbed sharply since May 1, suggesting renewed capital inflows are fueling the rally and increasing pressure on short sellers.
For XRP, the immediate price action is centered on the $1.40 level. A recent surge in volume accompanied the move above this pivot, suggesting stronger participation. Holding above $1.40 is critical to keep the breakout intact.
The next technical hurdle is the resistance zone between $1.41 and $1.42. A decisive move through this area would be needed to confirm continuation and build momentum for a larger squeeze. However, a drop back below $1.40 would signal a failed breakout and likely return the price to its recent consolidation range between $1.35 and $1.45.
This article is for informational purposes only and does not constitute investment advice.
