XRP Traders Cut Binance Leverage by a Quarter in Under a Month, and the Ones Left Are Leaning Long

CryptoQuant figures reveal that the estimated leverage ratio on Binance for XRP—the token associated with Ripple—dropped by 26.2% in less than a month. It slid from roughly 0.229 in September down to 0.169 this week as traders unwound borrowed positions in the wake of October’s liquidation wave. The excess speculation has vanished, leaving behind a smaller and more one-sided group of market participants.

XRP has risen 4.5% over a 24-hour period to reach $1.35, generating $1.68 billion in trading volume. Meanwhile, Ripple used the exact same day to urge the SEC to finalize rules that it argues would have prevented their prolonged legal battle.

So, is the XRP and Ripple market currently healthier, or simply quieter?

Binance XRP Estimated Leverage Ratio Drops 26.2% in Less Than a Month

“The decline may reflect a reduction in leveraged positioning, potentially mitigating the risks associated with liquidations.” – By @ArabxChain pic.twitter.com/eXfPyxe3Ts

— CryptoQuant.com (@cryptoquant_com) October 21, 2026

XRP Ripple Leverage: What Does the Binance Drop Mean?

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This drop points to fewer borrowed positions. The leverage ratio tracked by CryptoQuant divides open interest—the total value of active futures contracts—by the amount of XRP held in reserve on Binance. Consequently, a declining ratio indicates that traders are utilizing less borrowed capital relative to the coins stored on the exchange.

“The decline may reflect a reduction in leveraged positioning, potentially mitigating the risks associated with liquidations,” noted CryptoQuant analyst Arab Chain in a quicktake report.

The total capital involved has decreased as well. CryptoQuant metrics show that Binance’s XRP open interest stood at $453 million on October 17, down from $538.1 million on October 4. The most dramatic drop occurred on October 7 and 8, when XRP fell from $1.52 down to a low of $1.32 on Binance, forcing many long positions to close.

By way of context, Arab Chain previously pointed out that the ratio hit 0.213 on August 26—its highest level in more than seven months—just days after XRP peaked at $1.70. Leverage continued to build through late September, bringing the ratio to roughly 0.23, and XRP’s price has drifted downward ever since.

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Are XRP Traders Done Betting on a Bounce?

Not quite, and that represents the twist. While OKX data echoes the decline in position sizing, it paints a very different picture regarding market sentiment. Public trading statistics from OKX indicate that XRP futures open interest dropped by 32%, moving from $150.4 million on September 22 to $102.6 million on October 16. Over that same timeframe, the ratio of accounts holding long positions versus those holding short positions doubled, climbing from 1.97 to a peak of 4.05 on October 17.

Here is how the OKX data breaks down:

• Open interest: $150.4 million on September 22, $102.6 million on October 16, $108.9 million on October 20.
• Long-to-short account ratio: 1.97 on September 22, 4.05 on October 17, 3.45 on October 20.
• Funding rate: briefly negative on October 9, 15 and 18, and has since returned to a neutral 0.01% per eight hours today.

In short, while large leveraged players appear to have exited, an expanding group of smaller accounts has stepped in to buy the dip using their own leverage. A ratio hovering around 3.5 to 1 signifies that the crowd is leaning heavily in one direction, and overcrowded long positions are precisely what sudden market drops tend to target.

Funding rates indicate who is bearing the costs. When rates slipped below zero in mid-October, short sellers were paying long traders to keep their positions open, signaling that sellers were temporarily in control. Today’s neutral rate of 0.01% is the baseline, meaning no one is currently overpaying to maintain a specific side.

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Ripple’s Message to the SEC: The Token Isn’t the Security

What message is XRP sending to the SEC? Essentially, it is a call to finish the job. In its latest regulatory filing on Tuesday, Ripple submitted a comment letter supporting the SEC’s proposed Regulation Crypto Assets, with Chief Legal Officer Stuart Alderoty summarizing the stance on X.

1/ Today Ripple filed its comment letter on the SEC’s proposed Regulation Crypto Assets. We support the proposal, and the SEC has clear authority to adopt it.
2/ Years of “case by case, coin by coin” enforcement has pushed innovation offshore. We need holistic rules for digital…

— Stuart Alderoty (@s_alderoty) October 20, 2026

“The investment contract is the security, not the token,” he wrote. Under the proposed rule, a digital token would be classified as tied to a security only while the issuer’s promises to buyers remain active. Ripple argues that this status should be judged strictly on what the issuer actually stated, avoiding any vague “decentralization” tests.

XRP holders are well aware of the costs of the alternative. Ripple’s letter points out that XRP lost roughly 70% of its value—wiping out about $15 billion—within days of the SEC filing its lawsuit in December 2020, as major U.S. exchanges rushed to delist the asset. Conversely, when a judge ruled in July 2023 that XRP itself is not a security, its market capitalization surged by approximately $21 billion, and Coinbase along with Kraken relisted the token that very day. Reaching that legal milestone cost Ripple upwards of $150 million in legal fees.

The SEC officially published the proposal in the Federal Register on August 21. Implementing final rules would provide crypto exchanges with a clear, written compliance checklist rather than forcing them to wait for individual lawsuits to establish regulatory clarity.

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