XRP Derivatives Market Erupts in Early 2026: Longs & Shorts Get Liquidated in High-Stakes Frenzy

XRP derivatives trading hits hyperdrive as 2026 kicks off—liquidations rip through both bullish and bearish positions.

Blood in the Water: Leveraged traders face a brutal reckoning as volatility spikes. No one's safe—overzealous longs and cynical shorts alike get steamrolled.

The Casino Stays Open: Despite the carnage, trading volume soars (because Wall Street never met a volatile asset it couldn't over-leverage). XRP's price swings become a self-feeding frenzy—liquidations trigger more liquidations in classic crypto fashion.

As one smirking OTC desk trader quipped: 'We don't make the rules—we just profit from your stop-loss orders.'

In the first week of 2026, XRP went through a series of liquidations, first wiping out short positions, then returning with long liquidations on January 6. Following the turbulent days, XRP settled at around $2.12.

In the past year, XRP showed signs that older whales and large-scale holders used retail as exit liquidity. As Cryptopolitan reported earlier, XRP is seen as a potentially hot asset. XRP exchange reserves started to decline in the past few months, with 2.65B tokens available on Binance.

XRP reserves shifted mostly to Binance and Bithumb, while other markets saw significant outflows and lower activity. The concentrated trading on Binance means XRP may react quickly to sentiment shifts, while being exposed to more aggressive trading and market makers.

In the coming months, Ripple removed the speculations about an IPO, stating the company intended to remain private and rely on its $500M raise. 

XRP derivative trading attempts revival after October crash

The first week of 2026 saw the most active derivative trading for XRP. Open interest increased from recent lows, rising to $1.6B after months of low activity. 

In the long term, XRP open interest is yet to return to its peak of $4.89B from the summer of 2025. The slow altcoin season and overall market volatility put XRP in another medium-term freeze. 

The recent price action and liquidations show the market is capable of reacting. Binance was the main venue for liquidations, with over $7M in long liquidations for the past 24 hours. 

Can XRP return as a hot narrative? 

XRP relies on its base of loyal holders, surviving even with whales selling at the top. XRP mindshare is still at 1.2%, based on regular mentions on social media. However, mindshare has only expanded slightly by 1.2% in the past day. 

XRP still awaits a reliable breakout, as the current price action was mostly tied to the activity of derivative markets. The recent price rally also coincided with a price glitch, displaying the price at $9,866. For now, XRP is not seen as making a big breakout, as the focus is still on BTC and its ability to recover the $100,000 price range.

While XRP is viewed with some skepticism on crypto native markets, ETF buying returns. Ahead of the recent hike to $2.35, ETF buying picked up again, reaching the highest level since December 22. 

Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.