XRP experienced a sharp decline this week, dropping 22.5% from its recent high of $1.65. The sell-off was triggered by two consecutive U.S. inflation reports that unsettled financial markets. The Consumer Price Index (CPI) and Producer Price Index (PPI) reports, along with a weak opening for U.S. stock markets, put pressure on risk assets, including cryptocurrencies.
Despite the downturn, derivatives traders saw the decline as a buying opportunity. On Binance, the world’s largest crypto exchange, traders placed more than $184 million in XRP buying activity. The increase in buying activity was reflected in the Taker Buy Volume, an indicator that measures the volume of market buy orders in derivatives trading. Binance recorded over $73 million in XRP buy volume in a single hour, while Bybit and OKX saw significantly lower volumes during the same period.
The rise in buying activity came after a busy September for XRP’s derivatives market. Futures trading volume across Binance, Bybit, and OKX reached $56.18 billion, marking a six-month high. However, the increased activity also meant that traders had built up significant positions, leaving the market exposed to sharp changes when economic conditions worsened. At the start of October, open interest in XRP perpetual futures on Binance stood at approximately $485 million, down from the yearly peak of nearly $600 million recorded in late September.
By Friday morning, XRP had recovered approximately 4.5% from its lows to trade at $1.34. While such rebounds can occur after sharp sell-offs driven by economic news, the broader downtrend remains uncertain. XRP still faces economic pressures, including the Federal Reserve’s interest rate policy, which is expected to be raised again at the Oct. 27-28 Fed meeting.