XRP’s derivatives market went through a sharp deleveraging move over a matter of days. Data cited from CryptoQuant showed that around $60 million in open interest was erased from the XRP market, one of the largest leverage flushes since April. Most of that contraction reportedly took place on Bybit, where heavily leveraged long positions were rapidly liquidated and total open interest fell hard.
Price action did not collapse alongside that wipeout. According to CoinCodex, XRP stayed close to $1.16. For some market watchers, that combination matters: a steep drop in speculative positioning while spot price remains relatively steady can point to a market reset instead of a full structural break.
RSI Weakness Stands Out More Than Price Damage
Analyst EGRAG CRYPTO argued that XRP has clearly lost momentum, and the sharp drop in RSI is central to the current setup. RSI measures the speed and strength of price moves; readings above 70 are commonly associated with overbought conditions, while below 30 may indicate oversold territory. Even so, the indicator on its own is not treated as a sufficient trading signal.
In his view, the decline in momentum is deeper than in prior cycles. Yet XRP is still holding major long-term support levels, which he sees as a notable distinction from earlier episodes of severe market weakness. That resilience in structure, rather than the RSI slide itself, is what keeps the broader setup under close watch.
The 1-2-3 Cycle Model Returns to the Discussion
EGRAG CRYPTO linked the current move to a recurring “1-2-3” cycle pattern he says has appeared in earlier XRP phases. In that framework, the first stage is a breakout, the second is a deep correction that forces out weak hands, and the third is a stronger expansion higher. He suggested the current RSI collapse may represent that second stage, a difficult retest rather than the end of the structure.
Within that model, RSI 44 is the main level to watch. The analyst described it as the “green line,” and a decisive reclaim of that threshold would offer a clearer sign that upside momentum is starting to rebuild.
After the Flush, Attention Turns to Market Balance
Large leverage washouts are watched closely because they can reduce excessive speculation, ease funding imbalances, and lower the risk of cascading liquidations. Once weaker participants are pushed out, the market can shift into a more controlled risk environment where stronger hands look for re-entry.
Sentiment still appears soft, and momentum indicators remain under pressure. Even so, EGRAG CRYPTO’s position is that the larger structure has not changed. If the historic cycle model repeats, the combination of a record-deep RSI reset and a major open-interest wipeout could become a key signal in XRP’s next major phase.