The volume of XRP held in exchanges has surged to approximately 11.81 billion tokens, marking a high point for the year and potentially increasing short-term price volatility. Despite this, the derivatives market is witnessing a rapid decline in leveraged positions. Meanwhile, XRP Ledger anticipates implementing crucial bug fixes, including those related to an as-yet-unlaunched credit system, on October 23.
Exchange Inflows Climb as Derivatives Leverage Falls
According to CryptoQuant, XRP’s reserves on exchanges have reached levels exceeding 99% of the data points over the past year. On October 18, on-chain analyst CryptoOnchain noted on X that while exchange reserves have increased, leverage in the derivatives market has significantly decreased.
Binance‘s open interest in XRP positions has dropped by roughly 15.8% since the beginning of the month. During the same period, there has been a rise in the liquidation of bullish positions, indicating a considerable cleansing of leveraged trading from the market. The analyst highlighted that leverage has equilibrated faster than supply on exchanges, while the amount held in exchanges remains high.
Over the last 30 days, 1.6 billion XRP tokens have moved to Binance from large wallets, reaching a six-month high. XRP has been trading within the $1.28 to $1.35 range recently.
However, increased exchange reserves do not directly imply forthcoming selling pressure. The analysis suggests monitoring net inflow-outflow data alongside the movement of spot XRP exchange-traded funds (ETFs) in the next 5–10 trading days is crucial.
Spot XRP ETFs have recorded a total net inflow of approximately $1.8 billion, while Nasdaq-listed XRP treasury entity Evernorth manages around 473 million XRP. According to reports, institutional demand could absorb a portion of the rising supply on exchanges.
Decisive Vote Imminent for XRP Ledger Update
The “fixCleanup3_4_0” bug fix package for the XRP Ledger is slated to activate on October 23, contingent on ongoing support. The package addresses several issues, including those within Ripple‘s credit system introduced to banks and payment companies in June but not yet operational.
Independent validators, which reach consensus on the validity of network transactions, must approve rule changes. At least 29 of the 35 default trusted validators must consistently support the update over two weeks for it to proceed.
According to XRPL Dashboard, the package has 29 votes as of Monday, meeting the threshold. A single retraction could restart the two-week countdown.
The credit system itself falls short by ten votes from the approval threshold, with 19 current supporters. A separate proposal concerning vaults to hold lenders’ assets has 21 votes. Neither has commenced its countdown, and even with immediate support, the credit system might launch no sooner than early November.
The proposed model would require lenders to deposit XRP or another token into a vault; the agent would then lend these assets out for a set period. Loans and repayments will be ledger-recorded, with credit evaluations conducted off-chain by the agent. Without collateral requirements from borrowers, the agent’s assessment will be crucial to addressing default risks. Ripple aims to offer this framework to payment companies in need of liquidity while completing cross-border transactions.
Furthermore, the fix will close a loophole allowing the creation of new tokens under certain conditions by accounts authorized to destroy tokens on behalf of the issuer. It will also update algorithms determining overdue or defaulted loans and calculations related to vault holdings.
