XRP lost its leverage after Fed hike, and that may be exactly what bulls needed

Market impact: mixed, with a modestly constructive short-term setup but a bearish macro backdrop.

The key market change is not that XRP has become fundamentally stronger; it is that the sharp liquidation of leveraged longs may have reduced one source of forced selling. The article cites approximately $26.9 million in XRP long liquidations versus $3.59 million in shorts, suggesting the recent decline disproportionately removed bullish leverage. That can temporarily improve market structure by lowering the risk that small dips trigger another cascade.

However, the Federal Reserve’s return to rate hikes is a negative liquidity signal for crypto. Higher policy rates and concern about persistent inflation can support the dollar, raise the opportunity cost of holding non-yielding assets, and pressure speculative crypto valuations. The failed Senate advance of the CLARITY Act adds a separate regulatory overhang, particularly for XRP because its investment case is unusually sensitive to U.S. legal and institutional adoption expectations.

Positioning implications:

Binance XRP perpetual funding was reported at roughly -0.0053%, while Bybit remained slightly positive. Restrained or negative funding means bullish leverage is no longer clearly dominant. If spot buyers return while traders remain defensively positioned, short covering could amplify an XRP rebound. Conversely, negative funding is not itself bullish: it may simply reflect traders expressing continued skepticism while derivatives remain the main source of activity.

The main constraint is that leverage has not disappeared. XRP futures open interest was still reported near $2.86 billion, and derivatives activity continued to outweigh spot trading. This leaves the token vulnerable to renewed volatility if open interest expands without corresponding spot accumulation. In that scenario, any recovery could represent another leverage-driven rally rather than durable demand.

Trading interpretation:

The immediate bias is neutral to cautiously bullish on a squeeze/recovery basis, but medium-term risk remains bearish-to-mixed while tighter monetary policy and regulatory uncertainty dominate. A sustained recovery would be more credible if XRP holds the reported $1.25–$1.30 area, funding stays restrained, and spot volume improves. A break below that area would weaken the “healthy reset” thesis and raise the risk of another liquidation wave; renewed leverage without stronger spot demand would be an additional warning sign.

Traders should monitor XRP/BTC relative strength, Bitcoin’s response to the Fed decision, spot-versus-perpetual volume, open-interest changes, funding across major venues, and any renewed movement on U.S. crypto legislation.