A CryptoQuant analyst going by the pseudonym Arab Chain has drawn attention to a sharp rise in leverage in XRP trading on the Binance exchange. According to his data, the Estimated Leverage Ratio (ELR) climbed to around 0.1899 — the highest since the start of 2026, coinciding with XRP trading near $1.24.

The metric reflects how actively traders operate with borrowed funds. A rise to such levels indicates a clear increase in interest in the derivatives market.

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What the leverage ratio shows

According to Arab Chain, over the past several months the leverage ratio fluctuated in a range of roughly 0.15 to 0.18 and only once tried to break above its upper boundary. Recently it managed to do so, and the indicator reached its highest value of the year.

The increase coincided with strengthening XRP price momentum following periods of decline. This, according to the analyst, reflects a revival in the cryptocurrency's derivatives market and growing trader activity.

Why high leverage carries risk

From a market standpoint, the year's highest leverage level may point to traders' growing confidence in a continuation of the short-term upward move. At the same time, high leverage makes the market more sensitive to sharp swings: any strong price decline can trigger a wave of liquidations of both long and short positions.

The metric's history supports this caution. In mid-March 2026, when the ratio on Binance rose above 0.18, XRP fell by more than 17% in a week — from around $1.50 to approximately $1.27 amid the unwinding of positions. The continuing rise in the ELR also indicates that traders are increasingly working in the derivatives market with bets on the spot market.

Source: BeInCrypto