Binance XRP open interest hits two-month high, but the signals underneath are bearish

XRP futures open interest on Binance surged to $232.7 million on August 17, marking a 28.6% jump from roughly $181 million just two weeks earlier. It’s the highest level since June, and on paper, that kind of spike usually signals growing conviction. Dig one layer deeper, though, and the picture flips.

The problem is what’s happening alongside the open interest surge. Perpetual cumulative volume delta, a measure of whether aggressive buyers or sellers are driving trades, sat at negative $463.2 million on Binance. When open interest climbs while CVD craters, it typically means fresh short positions are flooding in, not longs piling on.

From contraction to cautious aggression

The rebound in open interest is especially notable given how quickly sentiment reversed. In July, Binance’s XRP open interest had contracted to a three-month low. The seven-day change metric swung from approximately negative $40 million on July 29 to a positive $38.9 million in short order.

Analyst Amr Taha, who flagged the divergence, put it plainly.

“The combination of rising open interest and declining perpetual CVD is consistent with new bearish positions being added.”

The spot market tells a similar story. CVD across spot exchanges shifted nearly negative $385 million toward net selling.

Whales are sitting this one out

Perhaps more telling than any derivatives metric is what large holders are doing, which is not much. Whale inflows into Binance have dropped to a three-month average of $61 million, the lowest level recorded since 2021.

On-chain active addresses actually reached a two-month high over the same period, suggesting retail participation is ticking up. Crowd sentiment has also dipped into what analysts describe as a bearish peak.

The $1 ceiling

XRP’s price has been hovering near the $1 mark, with levels around $0.995 to $0.998 reported in mid-August. That psychological threshold has proven stubbornly difficult to break through and hold.

The bearish lean in futures markets creates a self-reinforcing dynamic. As more short positions accumulate, any sudden price spike could trigger a short squeeze, forcing sellers to buy back and temporarily pushing prices higher. A breakdown scenario, where price slides and shorts get paid, would validate the current positioning.

With whale inflows at multi-year lows, any squeeze would likely be shallower and shorter-lived than historical precedents.

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