XRP (XRP) has dropped roughly 15% in February to trade near $1.37, with derivatives data showing declining leverage and fading momentum even as several pre-rally signals from late 2024 have begun to resurface.
What Happened: Leverage Fades, Pre-Rally Signals Return
The selloff has been accompanied by a measurable retreat in speculative activity. Analytics show XRP's Estimated Leverage Ratio has fallen to approximately 0.16, a level that suggests heavily leveraged traders have largely stepped aside.
The token continues to trade below both its 50-day and 200-day exponential moving averages. Data from CoinGlass shows declining open interest and calmer funding rates, pointing to reduced aggressive positioning from short-term participants.
Whale movements have added to the uncertainty, with more than 31 million XRP recently transferred to Binance, raising concerns about potential selling pressure.
Yet analysts note that three conditions present before XRP's late-2024 rally — which followed Donald Trump's election victory — have reappeared: rising exchange inflows, tightening USD liquidity in automated market-making pools, and shrinking XRP supply on exchanges. Spot XRP exchange-traded funds recorded $3.04 million in net inflows on Feb. 24, pushing cumulative deposits past $1.23 billion.
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Why It Matters: Spot Demand Replacing Leverage
The shift from leverage-driven trading to spot-based accumulation could determine whether XRP's current consolidation becomes a launchpad or an extended stall.
Macroeconomic headwinds are complicating the picture. Stronger-than-expected U.S. consumer confidence data pushed back expectations of near-term Federal Reserve rate cuts, with the CME FedWatch Tool showing June cut odds falling below 50%.
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