XRP's sideways price action since early February has frustrated bulls, but a CryptoQuant report offers a behavioral explanation for the market's structural shift. The report tracks XRP's leverage ratio on Binance, which surged to 0.185 in mid-March as traders borrowed capital aggressively.
That confidence evaporated during the sharp correction in late March. The leverage ratio plummeted to approximately 0.13, indicating a fundamental reassessment of risk appetite rather than a temporary pullback. Traders are now far less willing to bet beyond their spot holdings.
The report frames this as a broken risk appetite market, where participants are cautious despite the recovery in spot prices. The data suggests that while XRP spot buyers remain active, derivatives traders have retreated significantly.
For XRP bulls, this means the consolidation phase could persist until leverage ratios recover. The market psychology has shifted from aggressive speculation to defensive positioning, potentially limiting near-term upside momentum.
Counter argument: Some analysts argue that deleveraging can be healthy, reducing the risk of violent liquidations and laying groundwork for a more sustainable rally once confidence returns.