XRP Liquidity Dries Up: Futures Buy Volume On Binance Falls from $5.8B to $250M

[Ben Graham]

XRP has slipped below the $2 level, a psychologically important threshold, as broader market conditions continue to deteriorate and selling pressure weighs on risk assets. While Bitcoin dominates liquidity and investor attention, altcoins are struggling to attract sustained demand, and XRP is increasingly reflecting this imbalance.

According to a CryptoQuant report by Darkfost, the weakness in XRP is not an isolated event but part of a broader contraction across the altcoin market. Whether on spot markets or in derivatives, trading activity has been shrinking significantly over recent months. Liquidity is gradually drying up, signaling a clear retreat from speculative positioning as investors reduce exposure to higher-risk assets.

This trend is especially visible in XRP’s derivatives data. The Taker Buy Volume on Binance, which tracks aggressive buy orders in futures markets, has collapsed to its lowest levels of the year. After peaking above $5.8 billion in July, this metric has fallen to roughly $250 million, representing a sharp 95.7% decline.

Such a dramatic contraction highlights the near-total evaporation of buying pressure and underscores the lack of conviction among traders.

XRP Liquidity Compression Signals Downside Risk

According to Darkfost, the broader market context is a major factor amplifying XRP’s current weakness. Liquidations have been accumulating across crypto markets, confidence remains fragile, and many participants are still psychologically impacted by the October 10 event. This lingering stress has reduced risk tolerance, particularly among short-term traders who typically provide liquidity during corrective phases.

Beyond sentiment, altcoins are facing a clear structural headwind. Bitcoin continues to absorb the majority of available capital, both in spot and derivatives markets. As BTC dominance remains elevated, liquidity that would normally rotate into altcoins during recoveries is instead staying concentrated in Bitcoin. This leaves very limited room for a sustained rebound across the broader altcoin market, including XRP.

Within this environment, the sharp collapse in XRP’s Taker Buy Volume is not surprising. The signal becomes even more relevant given that it is unfolding on Binance, which still accounts for the largest share of global XRP trading activity. A sustained drop in aggressive buying on the dominant exchange highlights the depth of demand erosion.

At the same time, the Taker Buy Sell Ratio has remained negative for most of the period, confirming that sellers continue to dominate XRP’s derivatives market. Historically, such severe volume compression can precede volatility expansions.

However, in the current setup, the lack of meaningful buying pressure and persistent bearish positioning suggests downside risks remain elevated. Even ETF-related optimism has failed to offset these structural weaknesses.

XRP Price Struggles Below Key Moving Averages

XRP price action on the 3-day chart reflects a clear loss of bullish structure and growing downside pressure. After peaking above the $3.40–$3.60 zone earlier in the year, XRP has formed a sequence of lower highs and lower lows, confirming a medium-term downtrend. The recent breakdown below the psychological $2.00 level is particularly significant, as this zone previously acted as both support and consolidation.

From a technical perspective, XRP is now trading below its 50-day and 100-day moving averages, both of which have started to slope downward. This alignment reinforces bearish momentum and suggests that rallies are being sold rather than accumulated. The 200-day moving average, currently near the $1.70–$1.80 area, represents the next major structural support. A sustained move toward this level would not be surprising if selling pressure persists.

Volume dynamics further confirm weakness. Since the August high, volume has steadily declined, indicating fading participation and weak dip-buying interest. The sharp volatility spike in October was followed by distribution rather than continuation, often a sign of a local market top.

As long as XRP remains below $2.00 and fails to reclaim the declining moving averages, the path of least resistance remains to the downside. For any meaningful trend reversal, XRP would need to regain $2.30–$2.50 with expanding volume, signaling renewed demand rather than short-term relief rallies.

Featured image from ChatGPT, chart from TradingView.com