XRP trading data and derivatives indicate a significant shift in trader behavior, with leverage usage dropping sharply to its lowest level since 2024. This decline is a notable signal reflecting a change in risk appetite within the futures market.
The Estimated Leverage Ratio on Binance has fallen to around 0.169 in recent days, marking its lowest level since the beginning of 2024. This decrease in leverage suggests that fewer traders are engaging in high-risk positions and indicates a decline in excessive speculation, which often precedes sharp price movements or mass liquidations. Historically, lower leverage levels have been associated with a more stable market environment, reducing the likelihood of sudden liquidations.
This decline in leverage coincides with XRP trading near $1.86, exhibiting relatively stable price performance compared to periods of elevated leverage. This alignment reinforces the view that the market is undergoing a rebalancing phase following periods of heightened speculative activity.
The drop in leverage to its lowest level since 2024 can be interpreted in two ways: first, that traders have become more cautious and are waiting for a clearer directional signal; and second, that the market may be forming a more stable base ahead of any significant move.
Written by Arab Chain