The recent crypto crash did more than just shake prices — it exposed a hidden danger: too much leverage. When that leverage collapsed, it wiped out a vast amount of open interest across derivatives markets.
With that overhang now gone, many investors believe the market may be entering a healthier, more stable phase where value and fundamentals begin to matter again.
In a recent post on X, analyst Ripple Bull Winkle pointed out that the purge of roughly 40–50% of open interest has removed the “fuel” that powers explosive leverage‑driven rallies. With leverage largely drained, the path is now open for true value to emerge, and in that environment, XRP could shine.
What Really Happened: The Leverage Flush
On October 10, 2025, the derivatives market experienced a huge deleveraging event. Across major exchanges, outstanding futures and perpetual positions collapsed — for Bitcoin (BTC), open interest plunged from about $70 billion to $58 billion.
The entire crypto market just flushed 40–50% of its leverage. That’s the same setup Bitcoin had before it ripped from 74k to 126k. When leverage dies, TRUE price discovery begins. XRP is about to show its real value. $XRPhttps://t.co/RvjZYIUyQw
— Ripple Bull Winkle | Crypto Researcher 🚨 (@RipBullWinkle) November 27, 2025
That one‑day drop marked the largest single‑day reduction in leveraged exposure on record in dollar terms. Rather than a calm unwinding, this was a rapid, forced deleveraging — a purge of speculative risk across the system.
Why Lower Leverage Can Be a Good Thing
Excessive leverage tends to amplify volatility: small market moves trigger margin calls, causing cascading liquidations. This dynamic can produce sharp swings — and severe crashes.
When leverage retreats, markets often calm. Price action becomes less dependent on forced liquidations and more driven by genuine demand, investor conviction, and underlying fundamentals. That tends to favor sustainable growth, especially for assets with real use‑cases rather than purely speculative appeal.
The recent reduction in derivatives open interest suggests many traders have stepped back from high‑risk leveraged bets. Exchanges such as Bybit and Binance saw dramatic contractions in leveraged swap positions, signaling reluctance to rebuild risk so soon.
XRP: Clean Slate, Real Value?
For XRP, the timing may be ideal. Data from derivatives trackers shows XRP’s open interest dropped sharply — from about $8.36 billion to roughly $4.22 billion within days, a decline of about 50%.
We are on X, follow us to connect with us :- @TimesTabloid1
— TimesTabloid (@TimesTabloid1) June 15, 2025
That plunge implies many speculative positions have been liquidated or closed. What remains is likely to be either long‑term holders, institutions, or genuine spot buyers — participants with conviction rather than short‑term profit motives.
In a deleveraged market, such stable demand can drive value more sustainably. Without the noise of leveraged positions, real fundamentals — like on‑chain activity, adoption of the XRPL, and use‑case growth — can begin to shape price more clearly.
What to Watch Next
The next few weeks could reveal whether this structural reset will support a rebound. Indicators to monitor include rising spot volume, increasing on‑chain transactions, and renewed accumulation from long‑term holders.
Also watch derivatives data — if open interest remains low or grows slowly, that may suggest leverage‑free accumulation. If, instead, OI spikes again, it could signal revival of speculative excess.
The recent deleveraging purge may have been painful. But sometimes pain precedes clarity. With leverage cleaned out, a calmer, more rational market could emerge. In that environment — where fundamentals matter again — XRP may finally begin to show its true value.