XRP’s (XRP) spot market activity is fading across two key trading venues even as traders gradually increase leveraged positions in derivatives markets.

Trading volumes on South Korea’s Upbit have been declining, while spot deposits and withdrawals on Binance have nearly stalled. At the same time, Open Interest continues to rise despite subdued funding rates, suggesting traders are adding exposure cautiously rather than aggressively chasing price.

XRP Volume on Upbit Falls for a Fourth Week

XRP is trading around 1,655 won on Upbit, but market participation has steadily weakened. Weekly trading volume has declined for four consecutive weeks, falling from roughly 530 million XRP in late June to 258 million by mid-July.

That represents a drop of nearly 51% in just one month. The decline points to weaker trading activity and suggests local investor participation has cooled.

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Despite the slowdown, XRP remains Upbit’s second-largest trading market behind Bitcoin (BTC). However, the token is currently trading about 1.1% below its global fair value. 

The disappearance of the Kimchi premium, a price premium that has historically reflected strong retail demand in South Korea, further points to declining local interest in XRP.

Binance Spot Flows Have Nearly Stalled

The slowdown is also evident on Binance. According to on-chain analyst CryptoOnchain, XRP exchange-based inflows and outflows both plunged by roughly 99% over the past week. Meanwhile, on Binance, the number of deposit addresses fell 97.6% compared with the weekly average.

The sharp contraction suggests significantly fewer users are transferring XRP onto or off the exchange. While this does not necessarily indicate selling pressure, it does point to a broader decline in spot market participation as traders remain on the sidelines.

Derivatives Positioning Grows Despite Weak Spot Demand

While spot activity is fading, derivatives markets are telling a different story. XRP Open Interest increased 5.9% to 423.8 million on Binance, pushing the estimated leverage ratio up to 0.162, its highest reading in recent weeks. 

Meanwhile, funding rates remained close to neutral and fell 29.9% from the previous week. Even so, they still sit 172.5% above their monthly average and 271.7% above their quarterly baseline.

“This suggests the leverage build isn’t being driven by aggressive one-sided speculation, but rather a slow repositioning process occurring largely without spot participants at the table,” CryptoOnchain noted.

The cautious picture extends beyond derivatives. XRP’s Network Value to Transactions (NVT) ratio has climbed 45.6% above its three-month baseline, while transaction counts have fallen 33.6% and active addresses are down 16.4%. 

Together, these metrics suggest network usage is weakening even as market participants build derivatives exposure.

XRP Price Recovery Faces a Thin Spot Foundation

The data comes as XRP has posted modest gains over the past week, benefiting from the broader cryptocurrency market rally. The token traded at $1.13, up 3.96% over the past day.

However, the recovery is occurring amid weakening spot participation. While collapsing exchange flows can sometimes reflect investors moving assets into cold storage or exchange-traded products rather than actively selling, they also indicate a lack of fresh spot buying entering the market.

The divergence suggests derivatives positioning is playing a larger role in recent price action than spot activity. Whether the rally proves durable may depend on whether spot demand begins to recover.

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Source: BeInCrypto