XRP leverage ratio at lowest point since 2024: new rally in sight?

The Estimated Leverage Ratio (ELR) of XRP on Binance has fallen to one of its lowest levels in more than a year and a half. Onchain analyst Darkfost points to a striking similarity with a pattern from 2024, which at that time preceded a price surge of no less than 790%. The current XRP price stands at $1.08, a decline of 2.5% in the past 24 hours.

XRP is available at OKX and Bybit.

Leverage ratio reaches historic low

According to data from CryptoQuant, XRP’s ELR currently stands at 0.16, one of the lowest values recorded since November 2024. The ELR is a measure of how much borrowed capital is in the market relative to the total amount of XRP on an exchange. A low ratio indicates that traders have reduced their positions and that relatively little leverage is active.

This process of reducing is called deleveraging, and it can signal a healthy reset of the market. When speculative capital leaves the market, the foundation for a new upward move is often more solid than when price increases are entirely driven by leveraged positions.

Pattern from 2024 may repeat itself

In the summer of 2024, XRP traded around $0.40 and the ELR on Binance dropped to around 0.05, the lowest point in that period. That consolidation phase was followed by a spectacular rally of more than 790%, during which the leverage ratio also recovered as more traders entered the market. In his analysis on CryptoQuant, Darkfost says that the current situation strongly resembles that build-up.

Although the absolute values differ, the underlying pattern is similar: a market that is draining speculative positions, followed by a period of consolidation. Whether history actually repeats itself for XRP remains uncertain. The market is already moving slightly downwards, and a further decline to even lower ELR levels cannot be ruled out before a new upward trend begins.