The 6th-largest cryptocurrency with a market cap of more than $66.8 billion, XRP, is currently going through a phase of prolonged deleveraging on crypto trading platform Binance. While the digital asset trades around $1.07, on-chain data suggests that XRP could be on the cusp of a parabolic rally.
XRP undergoes deleveraging on Binance
According to data received on Friday, XRP’s estimated leverage ratio (ELR) on Binance has slipped to a reading of 0.16. This is actually one of the metric’s lowest readings since at least November 2024, and is closing in on the 0.15 reading recorded in April 2026.
For the uninitiated, the ELR compares the amount of open interest in futures markets to the reserves of an asset held on exchanges, providing an estimate of how much leverage traders are using.
A higher ELR indicates greater reliance on leveraged positions, and potentially higher liquidation risk, while a lower ELR suggests that leverage has been reduced, resulting in a healthier and more stable market structure.
The current drop in the ELR is primarily driven by a reduction in XRP’s futures positions. A good chunk of these positions got liquidated as a result of the recent correction in XRP’s price, resulting in a mechanical decline in XRP’s open interest.
Notably, XRP remains down more than 41 percent on a year-to-date basis. Over the past year – since July 2025 – the cryptocurrency has slumped by more than 69 percent.
That said, the ongoing XRP leverage cleanup is an essential part of the process for the cryptocurrency’s next potential rally, since excess accumulated leverage weakens the market’s foundation and makes price action more unpredictable.
A historical example
It’s worth emphasizing that a similar dynamic played out back in 2024, when XRP was trading around $0.40 and its ELR approached a reading of 0.05.
At the time, the cleanup in leverage was shortly followed by a massive rally of 790 percent, which itself was accompanied by a return of leverage which pushed the ELR up once again.
Recent exchange trends suggest a bullish outlook for XRP, as the cryptocurrency saw significant withdrawals from leading platforms like Binance, Coinbase, and Bybit. That said, there are still some concerns that point toward a fall below $1.
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