XRP Price Faces Market Paradox as 60% Supply Sits Underwater While Derivatives Activity Climbs

The XRP price is sending mixed signals right now. On one side, a massive chunk of the supply is sitting in losses. On the other, derivatives traders are suddenly showing renewed appetite for leverage.

Yeah… it’s one of those strange crypto moments where the market looks both pessimistic and speculative at the same time.

Data from on-chain analytics firm Glassnode shows that nearly 60% of XRP’s total supply about 36.8 billion tokens is currently underwater, per an x post. In simple, more than half the circulating supply is being held at a loss relative to when it was acquired.

And here’s the twist: that’s higher than during the COVID market crash, China’s crypto ban, and even the collapse of FTX.

XRP Price Holders Sitting In Loss

When a majority of tokens are underwater, it tells a pretty blunt story about market sentiment. A lot of investors bought higher. And now they’re waiting.

Historically, clusters of underwater supply often create psychological pressure. Some holders eventually capitulate. Others simply sit tight, hoping for a rebound.

Either way, the XRP price chart tends to reflect these emotional tug-of-wars. If price begins to recover, those underwater holders may become future sellers as soon as they reach break-even levels.

That’s one reason analysts often pay close attention to supply-in-loss metrics when building XRP price prediction scenarios.

Derivatives Traders Are Returning

While spot holders appear stuck in losses, the derivatives market is telling a different story. According to data from CryptoQuant, Arab Chain highlighted that open interest for XRP contracts on Binance has climbed above its 30-day average.

The numbers are fairly precise. Total open interest now sits around 447.7 million XRP, slightly above the 30-day average of roughly 426.7 million XRP.

The standard deviation stands near 16.38 million XRP, while the Z-Score has reached about 1.28. In derivatives analytics, a positive Z-Score means open interest is sitting above its typical historical range. Translation? Traders are opening more positions than usual.

Liquidity Creeping Back Into Market

A rising open interest reading often signals new capital entering the derivatives market, rather than simply existing traders reshuffling positions. That appears to be the case here.

The Z-Score remains positive but not extreme, suggesting leverage is expanding gradually rather than explosively. In other words, speculative activity is returning but it hasn’t reached overheated territory yet.

For the XRP/USD market, that creates a strange dynamic. On one side, a huge portion of holders are underwater. On the other, derivatives traders are quietly building positions again.

So the market is essentially balancing between latent selling pressure and renewed speculative interest. Which means the next major move in the XRP price might not be quiet.