Liquidation pressure cools on Binance
XRP traders on Binance are seeing fewer forced position closures after a run of liquidation spikes from late July through September. A Cryptoquant analysis published Oct. 2 looked at the change. Contributor PelinayPA said the pressure has eased, using a chart that combined exchange liquidations with a network valuation measure.
The shift came as derivatives exposure shrank. Binance open interest in XRP fell about 32% between Aug. 22 and Sept. 17, from roughly $323 million to $219 million. Open interest tracks contracts that remain open, so the decline suggests fewer borrowed bets tied to the token. Borrowed funds let traders control larger positions than their collateral, but they also cut both ways. Exchanges close futures positions when margin requirements are not met. Longs gain when prices rise. Shorts gain when prices fall.
Longs absorb more of the selling
The latest data showed an imbalance. Long liquidations were higher than short liquidations, the analyst said. That suggests traders positioned for further gains took the harder hit during recent downward price moves. In other words, the pain was not evenly spread.
XRP’s network value-to-transactions ratio, or NVT, also dropped 69.28% to 36.97 in the analysis. NVT compares market capitalization with onchain transaction volume in dollar terms. A lower reading can mean more transfers, a lower valuation, or both. If more value moved on the blockchain while NVT fell, network usage may have strengthened relative to market value. That could support prices, though the reading alone does not prove buying.
Activity is not the same as demand
September’s advance drew attention. Santiment counted 1,917 large transactions and 3,647 new wallets as XRP rose above $1.60 on Sept. 22. Those numbers show activity, not verified buying. Large transfers can be sales, internal moves, or exchange deposits. New addresses do not always identify new investors.
The same distinction applies to exchange activity. Spot buying means acquiring XRP itself. Perpetual futures offer price exposure without an expiration date and can be traded on margin. Fund flows give another view. U.S. spot XRP ETFs recorded $121.4 million in September inflows. On Oct. 2, Sosovalue reported $3.28 million in net outflows, all from Bitwise’s fund. The ETFs held combined net assets of $1.658 billion.
What a sustained move needs
The analyst said the decline in liquidations may offer some relief. For a lasting rise, spot buying, trading volume, and price structure would need to support the move. If spot demand shows up alongside the lighter derivatives picture, that could be a stronger signal. Without it, the market may remain vulnerable to sharp swings. Perhaps the next test is whether real buyers step in, not just fewer forced sellers.
