Woofun AI reports that XRP is trading near the critical $1 support level, exhibiting a leverage washout pattern that closely mirrors the market structure observed in 2024. This technical alignment has been highlighted by analyst Darkfost, who notes that despite the similarity in derivatives positioning, current bearish indicators on Binance and across other exchanges suggest a fragile market environment rather than an imminent reversal.

The broader technical structure remains distinctly bearish, characterized by price action consistently trading below the 50-day, 100-day, and 200-day moving averages. Since April, every attempted recovery has resulted in a lower high, with the most recent bounce failing to penetrate the nearest moving-average resistance. This sequence of diminishing peaks reinforces a downtrend where sellers maintain control over key psychological and technical levels, preventing any sustained upward momentum from taking hold.

Derivatives positioning has become significantly less aggressive during this decline, reflecting a broad reduction in risk appetite. Both the estimated leverage ratio on Binance and the all-exchange open interest have fallen sharply, indicating that futures exposure is being systematically removed from the market. While this deleveraging reduces the potential for leverage-related fragility and liquidation cascades, it does not generate the necessary demand to reverse the prevailing price trend, leaving the asset vulnerable to further downward pressure.

The dynamics of the moving averages further illustrate the weakness in the current setup. The three major daily moving averages are aligned above the current price and are all declining in trajectory. In late May, the 50-day SMA approached the 100-day average, raising hopes of a bullish crossover, but the two lines separated again as price weakened. This failure to complete a bullish crossover underscores the lack of buying strength required to shift the market structure from bearish to neutral or bullish.

Price action has followed a predictable sequence of lower highs, reinforcing the bearish narrative. XRP peaked near $1.55 in April, only to fail around $1.50 on the subsequent recovery attempt. The decline continued, reaching approximately $1.3 on June 15, before stalling near $1.18 in early July. Each successive peak has been lower than the last, confirming that sellers are increasingly dominant at higher price levels and that buyers are unable to defend previous support zones effectively.

Woofun AI data shows that momentum indicators and volume analysis provide additional evidence of weakening bullish conviction. The daily RSI has fallen to 44 after reaching approximately 58 during the latest bounce, now sitting below its moving average at 47. This indicates that momentum weakened before reaching overbought conditions, suggesting a lack of sustained buying interest. Volume has also faded to approximately 24.39 million, with no clear accumulation pattern behind the July advance, while more prominent recent spikes occurred during selling phases, further highlighting seller dominance.

Support and resistance levels define the immediate trading range, with buyers defending the $1.03-$1.05 area around June 5, again between June 25 and June 27, and during the early-July decline. Below this zone, the cycle-low wick sits between $1.01 and $1.02, followed by the untested psychological level at $1. Immediate resistance begins at the July 17 high near $1.09 and the July 14-15 wick area between $1.11 and $1.12. The declining 50-day SMA at $1.13 remains the most significant ceiling, as it successfully halted the latest recovery attempt, capping upside potential.

A deep dive into Binance’s leverage ratio reveals a metric currently standing at approximately 0.16, one of its lowest readings since November 2024 and close to the April 2026 low of 0.15. This decline developed alongside a price correction of roughly 70%, driven by both liquidated futures positions and voluntary closures by traders seeking to reduce exposure. The narrowing range creates three measurable outcomes: the prevailing trend, weakening RSI, and fading volume currently favor a bearish drift unless buyers can recover the upper boundary of the trading range.

Total open interest contraction confirms that the reset extends beyond Binance, with total XRP open interest falling from approximately $3.8 billion earlier in the visible period to roughly $0.7-$0.9 billion in the latest readings. This dramatic reduction indicates that the derivatives market is dominated by position reduction rather than sustained new leverage. Fewer outstanding positions reduce the fuel available for a liquidation cascade, although sharp price moves remain possible if support breaks or traders begin rebuilding exposure aggressively, signaling a shift in market sentiment.

Darkfost compared the current conditions with the deleveraging phase that developed in 2024, when XRP was consolidating around $0.40 while Binance’s estimated leverage ratio approached 0.05. That cleanup preceded a rally of more than 790%, during which futures exposure returned and the leverage ratio climbed again. The relevant similarity is the order of events: leveraged positions were removed before the next large directional move began.

However, the current ratio of 0.16 remains more than three times the 2024 low, and XRP is trading below a fully bearish moving-average structure with weakening momentum and no clear volume-based accumulation signal. A similar result would require renewed demand strong enough to reverse the lower-high sequence and rebuild participation without immediately recreating excessive leverage. The behavior of open interest during the eventual range break will help determine the quality of the move. If open interest continues drifting lower, the deleveraging process remains the dominant force regardless of short-term price fluctuations. XRP now has a cleaner derivatives structure but an unresolved technical problem. The leverage reset becomes constructive only if price converts it into a break above the falling 50-day SMA; until then, the $1.03–$1.05 shelf remains the level preventing the bearish trend from extending toward $1.