Crypto investor and trader Xaif Crypto has issued a pointed assessment of XRP’s current market condition, stating that the asset has entered a phase of investor exhaustion. He highlighted a sharp decline in the Estimated Leverage Ratio (ELR), which has fallen to 0.16. According to him, this development marks a decisive shift in market dynamics.
The Estimated Leverage Ratio measures the proportion of borrowed capital used in trading relative to the amount of XRP held on exchanges. A reading of 0.16 is exceptionally low by historical standards.
Such a figure indicates that leveraged positions, both long and short, have largely been closed or liquidated. High-risk trades using 20x or 50x leverage, which often amplify volatility through forced liquidations, are no longer a dominant feature of the current market structure.
Xaif Crypto’s interpretation is direct: speculative traders have exited. The aggressive positioning that frequently triggers rapid price swings has diminished significantly. With leverage compressed to these levels, the likelihood of sudden liquidation-driven spikes or crashes is materially reduced.
⌛️ $XRP Investor Is Exhausted 💭
Estimated Leverage Ratio collapsed to 0.16. SMA(30) and SMA(50) still trending down. Speculative longs and shorts are gone.
Now it becomes a spot demand story https://t.co/4r0h13xb0s pic.twitter.com/cRxJt2LuPx
— Xaif Crypto🇮🇳|🇺🇸 (@Xaif_Crypto) February 23, 2026
Speculative Activity Declines Across the Board
The trader further stated that speculative longs and shorts are effectively gone. In periods of bullish momentum, markets often become crowded with leveraged long positions, creating vulnerability to sharp corrections. Conversely, during downturns, short sellers can accumulate in large numbers, increasing the potential for abrupt short squeezes.
The absence of both suggests a state of indifference among short-term participants. Traders appear unwilling to commit capital aggressively in anticipation of immediate price movements. This condition typically follows extended sideways or downward price action, during which short-term market participants gradually withdraw due to reduced volatility and limited opportunity.
The chart attached to Xaif Crypto’s post shows the ELR trending downward alongside its 30-day and 50-day simple moving averages. Both moving averages continue to slope lower, reinforcing the view that deleveraging has been sustained rather than temporary.
A Shift Toward Spot Demand
Xaif Crypto emphasized what he considers the most important consequence of this development: XRP has transitioned into a “spot demand story.” In practical terms, this means that derivatives activity is no longer the primary force influencing price action.
With leverage largely absent, future price increases would need to come from genuine buying activity in the spot market. Organic accumulation, whether from retail holders or institutional participants, becomes the central driver. Under these conditions, price appreciation would reflect actual demand for the asset rather than speculative positioning in futures markets.
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At the time reflected in the chart, XRP was trading near $1.39. However, the 30-day and 50-day moving averages remain in decline. This signals that while the market may be structurally healthier due to reduced leverage, momentum remains weak. Until those averages stabilize or price action moves decisively above them, the current exhaustion phase could persist.
Xaif Crypto’s conclusion is clear: the liquidation-driven volatility that defined prior periods has largely subsided. From this point forward, XRP’s trajectory will depend on sustained, real buying interest rather than leveraged speculation.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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