Most Speculative XRP Traders Are Officially Wiped Out. Here’s What Happened

Crypto analyst Steph Is Crypto has reported a significant development in the XRP derivatives market, stating that leverage tied to the asset has fallen to one of its lowest levels of the year.

In his tweet, he stated that XRP leverage has “collapsed” and that most speculative traders have been “officially wiped out.” The statement was accompanied by a chart showing Binance’s Estimated Leverage Ratio (ELR) for XRP alongside price action.

The chart indicates that the ELR has dropped to approximately 0.16, a level not seen since the early stages of the 2025 rally. This marks a steep decline from mid-2025, when leverage climbed above 0.60 as XRP traded near its yearly highs.

At that time, the price approached the $3.65 region while speculative interest intensified. The current reading reflects a dramatic contraction in leveraged exposure, representing roughly a 70 percent reduction from peak levels.

The Deleveraging Event and Its Implications

A collapse in leverage typically signals that traders using borrowed capital have been forced out of their positions through liquidations.

High leverage tends to increase market fragility, as even modest price declines can trigger cascading forced sales. According to the data shared by Steph Is Crypto, that fragility has now been largely removed from the XRP market.

With the ELR near 0.16 and XRP trading around $1.39 at the time reflected on the chart, the market structure appears materially different from the overheated conditions observed during the 2025 peak.

The sharp decline in leverage suggests that a broad wave of liquidations has already occurred, effectively clearing out a substantial portion of high-risk positions.

From Fragility to Stability

Lower leverage is often interpreted as a reset phase in market cycles. When speculative traders exit, price action is typically driven more by spot market participation rather than short-term leveraged bets. As presented in the chart, the current environment shows that XRP is operating with significantly reduced derivatives pressure.

This reduction in leveraged long positions may also decrease the probability of sudden liquidation-driven declines. Without a large cluster of overextended positions vulnerable to forced selling, the likelihood of abrupt volatility events diminishes. Such periods are frequently characterized by steadier trading ranges as the market recalibrates.

Historical Context and Key Levels to Watch

The contrast between mid-2025 conditions and the present setup is notable. When XRP reached its yearly highs near $3.65, leverage was elevated and speculative activity intense. The current level of 0.16 aligns more closely with leverage floors seen before previous upward price expansions.

Market participants are now watching the $1.30 to $1.35 range as an important support zone. Holding this area while leverage remains subdued would reinforce the case that a structural bottom may be forming.

Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.

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