XRP at $1 Risk Zone as Polymarket Prices 65% Odds of Further Decline

XRP Faces Critical Test as Polymarket Odds Signal 65% Chance of Drop Below $1

Prediction market platform Polymarket has assigned a 65% probability of XRP falling below the $1 threshold, intensifying scrutiny on the token's support levels. XRP has consolidated near $1 for nearly two months, with July closing at $1.06 as August trading begins.

XRP has been trading within a tight range around the $1 level for approximately two months, with July closing at $1.06 and August opening with the token maintaining this critical support. This prolonged consolidation phase has historically preceded bullish rebounds, but current market dynamics suggest the bearish case carries significant weight. Polymarket's 65% odds of XRP dropping below $1 have sparked debate about whether the prediction market is accurately pricing in fundamental weaknesses or simply reflecting short-term sentiment. The token has demonstrated resilience at these levels, but weakening competitive metrics and building leverage point to potential downside risks that could materialize in the coming weeks.

The monthly and quarterly trends for XRP have shown resilience, with the token holding above the psychological $1 level despite broader market volatility. However, zooming in reveals a deteriorating competitive position that could explain why the bearish odds have gained traction. XRP's underperformance against other major assets, particularly Ethereum, has become increasingly pronounced. The XRP/ETH ratio has declined nearly 5% in August, extending July's 13% drop, which represented the ratio's worst monthly loss of the year. This erosion of relative strength suggests that capital may be rotating toward better-performing assets, potentially accelerating if Bitcoin continues to hover near resistance levels.

XRP/ETH Ratio Decline Highlights Weakening Competitive Position

The XRP/ETH ratio's performance has emerged as a key indicator of XRP's relative weakness in the current market environment. Ethereum closed July up over 18%, while XRP managed only a 2.18% gain during the same period. This disparity means ETH's monthly ROI was approximately 10x ahead of XRP, highlighting where investor capital has been flowing. The divergence becomes particularly relevant as Bitcoin continues to hover near resistance, creating conditions where rotational flows into stronger-performing assets become increasingly likely. If the XRP/ETH ratio continues its decline, the nearly 5% pullback observed in early August could mark the beginning of a deeper correction that validates Polymarket's bearish probability.

MetricCurrent ValueSignificance

Polymarket Odds	65%	Probability of Drop Below $1
July Close	$1.06	Monthly Support Level
XRP/ETH August Change	-5%	Relative Weakness Indicator
XRP/ETH July Change	-13%	Worst Monthly Loss
ETH July ROI	+18%	Comparison Metric

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The weakening XRP/ETH ratio reflects broader concerns about XRP's competitive positioning within the cryptocurrency ecosystem. While XRP has maintained its status as a top-tier digital asset, its underperformance against Ethereum suggests that market participants are favoring alternative assets with stronger growth narratives or more robust ecosystem development. This dynamic could continue to pressure XRP, particularly if the broader market enters a risk-off phase where capital concentrates in the strongest performers. The ratio's decline has been consistent and accelerating, signaling that the bearish odds are not merely speculative but grounded in observable market trends.

Open Interest Rebuilds to $2.5 Billion, Raising Leverage Concerns

On-chain data reveals that XRP's Open Interest has climbed back to approximately $2.5 billion, returning to levels last seen in mid-July. During that previous period, bulls failed to hold the $1.15 level, triggering a major liquidity sweep that pushed XRP down to $1.03 in early August while OI fell to $2.36 billion. The rebuilding of leverage to similar levels now puts additional pressure on the $1 support zone. If bulls fail to hold support again, another sharp liquidity sweep could materialize, potentially pushing XRP below the critical $1 threshold. The accumulation of leveraged positions creates conditions where a downside move could accelerate rapidly as positions are liquidated.

The leverage buildup is particularly concerning given the current price action and weakening competitive metrics. Traders have been adding positions at levels that previously led to a significant sell-off, creating a setup where the market may be vulnerable to a similar outcome. The $1 level now serves as a critical line that must hold to prevent a cascade of liquidations that would likely push price lower. The combination of elevated open interest and weakening fundamentals suggests that the bearish scenario carries substantial risk, even as bulls attempt to defend the support.

Burns and Network Activity Provide Fundamental Support

Despite the bearish technical signals, XRP's fundamentals offer some support for the bullish case. The token's deflationary tokenomics remain one of its stronger attributes among major layer-1 networks. Over the past 206 days, XRP's total supply has dropped from approximately 99,985,726,061 to 99,985,630,555, representing a burn of roughly 95,506 XRP at a rate of about 463 XRP per day. While these burn amounts are relatively modest compared to the total supply, they represent a consistent reduction that could provide price support over the long term.

Network activity has also shown positive trends, with XRP Ledger's 7-day average active addresses increasing 8.1% over the past week to average approximately 15,200 daily. This rising network activity, combined with the steady XRP burns, gives bulls some fundamental support even as price action remains weak. However, these fundamentals may be insufficient to offset the building technical pressure, particularly as XRP continues to lose ground against Ethereum and leverage builds back up. The burns look less like a routine reduction and more like a strategic intervention to protect holder value while the token struggles to regain momentum.

Bearish Scenario Remains Active as Bulls Face Critical Test

The current setup suggests that XRP is not yet fully bullish, and the risk of another July-style liquidity sweep remains significant. The $1 support level has become increasingly vulnerable as open interest builds and relative strength deteriorates. If smart money does not step in to defend these levels, the Polymarket odds of XRP falling below $1 could be validated, potentially triggering a more significant correction. The outcome will depend on whether bulls can defend the $1 level and reverse the XRP/ETH ratio's decline or whether sellers ultimately gain control and push the token lower. The prediction market's 65% odds suggest that the bearish scenario has gained substantial traction, and the coming sessions will determine whether these odds are validated or rejected by actual price action.