XRP Futures Open Interest Falls 37% Amid SEC Uncertainty & ETF Race

XRP’s trading dynamics have shifted notably in recent weeks. The futures open interest—an indicator of market participation in derivative contracts—has dropped by 37% since January 15. This contraction followed a 25.7% correction over the week ending February 6, with the $2.30 support level acting as a critical floor for prices. An 8% daily gain on February 7 pushed XRP’s price to $2.50, yet the overall decline in leveraged positions hints at a cautious stance among professional traders. Despite this, the annualized premium on monthly futures has rebounded to 10%, even though XRP currently trades roughly 25.5% below its all-time high of $3.40.

• XRP’s futures contracts fell by 37% from their January 15 peak, reflecting a significant contraction in leveraged positions.

• XRP experienced a 25.7% correction over the week ending February 6, only to rally 8% on February 7, lifting prices to $2.50.

• While monthly futures premiums have bounced back to a bullish 10%, the perpetual contracts funding rate remains low at 0.2% per month—signaling retail caution amid institutional optimism.

• The SEC’s pending appeal decision on Ripple’s case and the race to launch an XRP ETF (potentially attracting up to $8 billion in inflows) stand to dramatically influence XRP’s near-term trajectory.

• Ripple’s rapid minting of 9.1 million RLUSD tokens in 12 hours, alongside growing platform listings, reinforces its strategy to bolster stability within its broader ecosystem.

XRP futures open interest | Source: CoinGlass

The market shows a clear divide:

• Institutional Investors: The rise in futures premiums suggests that institutions are still inclined toward a bullish outlook. Their long-term positions indicate confidence that the current dip may present a buying opportunity.

• Retail Traders: Conversely, aggregate open interest in perpetual contracts across platforms such as Binance, Bybit, and Bitget is nearing $2.5 billion. However, a declining funding rate—now at 0.2% per month compared to 0.9% a fortnight ago—reflects diminished enthusiasm among retail participants.

XRP/USDT price chart | Source: KuCoin

A critical element in XRP’s near-term performance is the SEC’s legal strategy against Ripple. The SEC’s appeal regarding the classification of XRP as an unregistered security has introduced considerable uncertainty. With the upcoming closed SEC meeting scheduled for February 13, market participants are split on possible outcomes:

• Bullish Scenario: If the SEC withdraws its appeal, XRP could surge past its previous high of approximately $3.55.

• ETF Catalyst: A favorable regulatory decision could pave the way for an XRP-spot ETF, with experts estimating net inflows of up to $8 billion—potentially pushing XRP toward the $5 mark.

• Bearish Outcome: Conversely, continuation of the appeal could drive XRP’s price down, with some forecasts warning of levels below $1.50.

Read more: What Is an XRP ETF, and Is it Coming Soon?

XRP ETFs to Offer A New Growth Avenue

Parallel to the regulatory narrative, excitement is building around the potential approval of an XRP ETF. Institutional analysts are increasingly optimistic, with some, like EGRAG Crypto, projecting that a successful ETF launch could trigger explosive price gains—even suggesting an eventual rise to $27 in a highly optimistic scenario. Such expectations underscore the role an ETF could play in attracting significant liquidity and validating XRP’s position in the crypto market.

RLUSD market cap | Source: Coinmarketcap

While XRP’s price oscillates amid regulatory and derivative market pressures, Ripple is actively expanding its ecosystem through its stablecoin, RLUSD. Recently, Ripple minted 9.1 million RLUSD tokens in just 12 hours—a key milestone that follows an earlier issuance of 1 million tokens on February 7. With RLUSD now listed on major platforms like Revolut and Zero Hash, and discussions underway with exchanges such as Binance and Coinbase, the RLUSD stablecoin is rapidly positioning itself as a low-volatility alternative within Ripple’s ecosystem. This dual strategy—navigating XRP’s volatility while boosting RLUSD’s adoption—could prove pivotal in providing stability and additional utility to the Ripple network.

Read more: What Is RLUSD: A Comprehensive Guide to Ripple’s Stablecoin?

XRP price forecast | Source: X

Market forecasts for XRP remain diverse, reflecting the coin’s sensitivity to both technical signals and regulatory developments:

• Optimistic Outlook:

• EGRAG Crypto’s Prediction: Some analysts, including EGRAG Crypto, are projecting an aggressive upswing. Leveraging technical indicators like the Bull Market Support Band, XRP could potentially surge to an eye-popping $27 if bullish momentum builds rapidly over the next few weeks.

• Institutional Insight from JPMorgan: JPMorgan has highlighted that the approval of an XRP ETF could attract up to $8 billion in net inflows, a scenario that might propel XRP toward an $8 price point over the course of the year.

• Cautious Considerations: A sustained regulatory headwind or the continuation of the SEC’s appeal could stifle the bullish scenario, potentially keeping XRP under pressure or even pushing it toward lower support levels around $1.50 if market sentiment turns markedly negative.

The divergent forecasts illustrate that XRP’s future is highly contingent on both market dynamics and key regulatory decisions. As the market continues to digest these developments, traders should monitor upcoming SEC decisions, ETF news, and support levels closely.

XRP is navigating a pivotal moment marked by a sharp drop in futures open interest, mixed market sentiment, and critical regulatory decisions on the horizon. The potential for an XRP ETF, combined with the ongoing legal developments and the strategic expansion of Ripple’s RLUSD stablecoin, presents a complex yet promising picture. Investors should closely monitor key support levels around $2.30 and remain alert for any breakthrough in the SEC appeal or ETF approval process, as these could redefine XRP’s trajectory in the coming weeks.