XRP's Market Disconnect: Spot Demand Rises as Liquidations Surge and Network Activity Tumbles

XRP holds $1.09 as spot demand rises but futures open interest drops 20%, long liquidations jump 94%, funding rates climb 266%. Network activity slumps with active wallets at yearly second-lowest.

The price of XRP has spent the past week hovering around $1.09, a level that masks a growing rift between the asset's spot and derivatives markets. While buyers on exchanges like Binance have stepped up their accumulation, the futures side is bleeding — and the underlying network is quietly sending its own warning signals.

Between July 4 and July 8, spot trading volumes for XRP on Binance ticked higher, even as sentiment remained subdued. That pickup contrasts sharply with what is happening in the leveraged market. Open interest across major venues such as Binance has dropped by roughly 20% since mid-June, sliding from above $500 million to $399 million by July 10. Long liquidations over the same span shot up 94% week-over-week and now sit 172% above the three-month average. Short liquidations, meanwhile, fell 53%.

What makes the derivatives picture especially odd is the behavior of funding rates. Despite the wave of long positions getting wiped out, funding on Binance did not collapse. After briefly turning negative in late June, it rebounded — climbing 266% in a week to 0.007. CryptoQuant points out that this creates an unusual pattern: traders opening new longs today are paying higher premiums even as overall leverage in the market shrinks. Analysts often interpret a combination of falling open interest, heavy long liquidations, and rising funding rates as a sign that excessive speculative froth has been flushed out, potentially setting the stage for a reversal if spot demand persists.

But the on-chain picture offers little reason for celebration. The XRP Ledger recorded just 25,350 active wallets on July 11 — the second-lowest tally of the year. New address creation plunged even further, with only 2,130 new wallets added, the weakest figure since November 2024. Total active addresses currently stand 11% below the three-month average, and while transaction volume eked out a 3–4% gain over the past week and month, it remains 21% below the same benchmark.

Much of the inactivity can be traced to large holders. Roughly 68% of XRP's circulating supply is controlled by wallets that are increasingly moving coins into long-term storage rather than transacting. That concentration cuts liquidity and depresses the network activity metrics that traders watch as a proxy for fundamental demand.

On the infrastructure side, the network is in the middle of a software transition. The new server version 3.2.0, released June 15, has been adopted by 89% of the 35 validators on the official Unique Node List — comfortably above the 80% threshold needed for activation. Yet among the roughly 833 active nodes, only 43% have upgraded; 51% still run the older 3.1.3 software. That gap creates uncertainty for exchanges and custodians that rely on consistent confirmation times. A separate security package, fixCleanup3_2_0, is still well below the required approval level for independent activation.

Institutional capital is also pulling back. After nine straight weeks of inflows totaling $196 million, XRP-based US spot ETFs recorded a net outflow of roughly $7.18 million in the week through July 10. The combination of fading ETF demand, subdued network growth, and a fractured derivatives market has left the token technically exposed.

XRP currently trades just 8% above its 52-week low of $1.01, hit on June 26. The 50-day moving average sits at $1.17, the 200-day at $1.46 — meaning the token is roughly 7% and 25% below those levels, respectively. The relative strength index stands at 44.1, neutral territory that offers no clear directional signal. From its July 2025 high of $3.65, the coin has shed more than 70% of its value, with a year-to-date loss of 41.75% and a 12-month decline of 54.55%.

Prediction markets in early July priced a high probability that XRP would stay above $1, but assigned much lower odds to a breakout above $1.10 — precisely the zone where the token now lingers. Whether the rising spot appetite on Binance can turn into a sustained recovery will depend on XRP reclaiming resistance levels that have repeatedly stymied rallies in the second half of the year. Until the on-chain metrics show a genuine rebound in user activity, the weight of the bearish signals will continue to offset any flickers of optimism from the spot market.