XRP's Recovery Halted by Heavy Supply and Leverage Risks

XRP's price has been on an upward trend since its August breakout, climbing from around $1.00 to nearly $1.70 in just three days. Since then, it has entered a consolidation phase, trading between approximately $1.30 and $1.49.

However, this rally was not fueled by a fresh build-up of leverage, as evidenced by the decline in 30-day Open Interest (OI) on Bybit from around 61 million XRP at the end of August to -37.5 million XRP two weeks later, representing a 98.5 million XRP turnaround.

This divergence suggests that XRP's advance was driven by spot-driven accumulation rather than leverage-fueled buying or selling. Furthermore, traders have steadily reduced their outstanding exposure, which could indicate a decrease in risk-taking and a more cautious approach to the market.

Despite this, XRP remains in a strong recovery range, with its price firmly above its August breakout level. However, it needs to clear $1.49 with stronger spot demand to continue its upward trajectory, as heavy supply caps the recovery at key price levels.