Could a 65% Polymarket probability of XRP falling below $1 signal more weakness ahead?

A 65% Polymarket probability of XRP falling below $1 pointed to meaningful short-term downside risk, but it did not necessarily predict a lasting collapse. The contract only required XRP to touch the $1 threshold during August, making the headline more bearish than the actual bet.

XRP was already trading close to that level while momentum weakened, leverage rebuilt, and Ethereum continued outperforming it. Still, prediction-market odds, derivatives positioning, network activity, regulation, and XRP’s token mechanics tell different parts of the story.

What does Polymarket’s 65% XRP probability really mean?

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The 65% figure meant traders were pricing a sizable chance that XRP would touch $1 during August. It did not mean they expected XRP to finish August below that level or stay there afterward.

Polymarket’s rules make that distinction clear because the downside contract uses Binance’s XRP/USDT one-minute candles. A final low at or below the specified threshold on any qualifying candle is enough for that outcome to resolve Yes.

That means XRP could briefly fall to $0.99 before quickly rebounding above $1.10 and still satisfy the contract. Investors should therefore avoid reading the probability as a forecast of XRP’s month-end value.

The odds themselves also come from traders rather than an independent forecasting model. Polymarket says displayed probabilities generally reflect the midpoint between bids and offers in its order book.

When traders become more willing to buy Yes shares, the implied probability can rise quickly. It can fall just as fast when price action, market sentiment, or new information changes expectations.

The 65% figure is best viewed as a snapshot of short-term trader sentiment around a nearby price barrier. It becomes much more useful when combined with XRP’s chart, derivatives positioning, and fundamental data.

Why does the $1 level matter so much for XRP?

A man analyzing cryptocurrency trading app. — Source: ifeelstock/Depositphotos

The $1 price matters because XRP has spent weeks trading close enough to it for relatively normal crypto volatility to trigger a break. The psychological importance of a round number can also attract orders from buyers, sellers, and leveraged traders.

One analysis provided for this article placed important chart support around $1.02, close to the price XRP had repeatedly defended. A confirmed breakdown could expose lower areas around the low $0.90 range if sellers maintain control.

The bearish technical case has also included a possible head-and-shoulders formation. That setup normally becomes more meaningful only when price clearly breaks its neckline with enough selling activity to confirm the move.

Volume therefore matters as much as the shape visible on a chart. The supplied analysis noted that selling volume strengthened during pressure on support while subsequent buying appeared less convincing.

XRP has also struggled relative to Ethereum, which adds another layer to the bearish argument. The supplied data showed the XRP/ETH ratio declining more than 13% in July and weakening further during early August.

That underperformance suggests some crypto capital has preferred ETH while XRP has remained pinned near support. However, relative weakness against Ethereum does not guarantee XRP will fall in dollar terms because both assets can move higher or lower together.

Fun fact: Three things are hitting the token at once: cooling ETF demand, falling network activity, and a wave of long liquidations.

Does rising open interest make another drop more likely?

Rising open interest can increase the potential for volatility, but it does not prove that XRP traders are building bearish positions. Open interest measures derivatives contracts that remain outstanding rather than showing which side will ultimately win.

The supplied CoinGlass data placed XRP open interest near $2.5 billion after it had previously fallen toward $2.36 billion. That rebuilding of leverage deserves attention because highly leveraged markets can produce sharp liquidations when price moves.

However, every futures contract involves a buyer and a seller. CME explains that open interest grows when new contracts are created and falls when positions are closed, making it useful only when combined with other market information.

A rising XRP price accompanied by growing open interest can carry a different meaning from falling prices with rising open interest. Funding rates, liquidations, futures basis, and long versus short positioning can provide additional clues about which traders face greater pressure.

If XRP breaks $1 while leverage remains elevated, forced liquidations could accelerate the move. The same mechanism can work upward if bearish traders become crowded and price suddenly rebounds through resistance.

Investors should therefore treat the $2.5 billion open-interest figure as evidence of greater positioning rather than proof of an incoming selloff. The direction of price and the structure of those positions matter more than the headline number.

Fun fact: The war with Iran is currently the dominant force acting on risk assets like crypto, and by extension XRP.

Are XRP’s token burns strong enough to support its price?

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XRP burns reduce total supply, but their current scale is far too small to provide strong near-term price support by themselves. The XRP Ledger automatically destroys transaction fees as part of its normal operation.

Official XRPL documentation explains that the transaction cost exists primarily to protect the network from spam and denial-of-service attacks. The XRP used for the fee is permanently destroyed instead of being paid to Ripple, validators, or another participant.

The figures provided in the earlier analysis showed about 95,506 XRP disappearing from supply over 206 days. Against a supply close to 100 billion XRP, that represents only about 0.000096% of the starting amount.

That scale makes it difficult to argue that recent burns are materially tightening XRP supply. The burns are technically deflationary, but their economic impact is tiny compared with trading volume, investor demand, and broader market movements.

It is also inaccurate to describe those burns as a strategic intervention designed to defend XRP’s price. They occur automatically when transactions are processed and are not activated by Ripple when the token becomes weak.

Network activity can still matter because higher genuine usage provides information about demand for the ledger itself. Investors should separate increasing activity from the much stronger claim that transaction burns can prevent XRP from dropping below $1.

Could regulation change the bearish XRP setup?

Regulatory developments could influence XRP sentiment, although its U.S. legal story is more settled than some bearish coverage suggests. The SEC and Ripple dismissed their respective appeals in August 2025, resolving the agency’s civil enforcement action.

The district court’s final judgment remained in place after those appeals were dismissed. That judgment included a $125 million civil penalty and an injunction concerning Ripple’s compliance with securities registration requirements.

Broader U.S. crypto market regulation remains a separate issue through the Digital Asset Market Clarity Act. The legislation seeks to establish a clearer framework dividing responsibilities across federal regulators for digital commodity markets.

The Senate schedule currently puts the legislation back in focus in September. A cloture motion involving H.R. 3633 is scheduled to ripen on September 15, meaning Congress could remain an important source of XRP volatility.

XRP also has regulated U.S. investment products that offer another gauge of demand beyond perpetual futures and prediction markets. SEC filings show that the Grayscale XRP Trust ETF holds XRP and trades on NYSE Arca under the ticker GXRP.

Those developments do not eliminate the possibility of a break below $1. They do show why investors should avoid reducing XRP’s outlook to chart pattern or prediction-market probability.

What would confirm that XRP has more weakness ahead?

A brief move through $1 would satisfy Polymarket’s contract, but it would not automatically confirm a lasting bearish trend. More convincing weakness would require XRP to lose support and struggle to recover it while broader demand continues deteriorating.

Price behavior immediately after a breakdown would therefore matter more than simply crossing the number. A fast recovery above $1 could suggest a liquidity sweep, while repeated closes below support would make deeper weakness harder to dismiss.

XRP’s performance against Ethereum should also remain on investors’ watchlists. Continued deterioration in XRP/ETH could suggest traders still prefer Ethereum when allocating capital among major crypto assets.

Derivatives data can provide another confirmation if leverage builds while price continues falling and funding becomes increasingly one-sided. Liquidation activity would help show whether leveraged positions are amplifying normal selling into a more serious market move.

Spot and regulated investment demand provide the other side of the test. If XRP-related investment products continue attracting capital while short-term traders turn bearish, the market could be showing a split between tactical positioning and longer-term demand.

The original 65% Polymarket probability therefore signaled a genuine risk of XRP testing $1, but not enough evidence by itself to predict sustained weakness. A lasting bearish shift would require confirmation from price, volume, derivatives positioning, relative performance, and investor demand after the $1 level is tested.

TL;DR

Polymarket traders had assigned a 65% probability to XRP falling to $1 during August, but the contract required only a brief touch of that price rather than an August closing price below $1.
XRP’s weak performance against Ethereum, bearish chart structure, and rebuilding derivatives open interest support the case for more short-term volatility.
Rising open interest does not automatically mean traders are bearish because every derivatives contract has both a long and short side.
XRP transaction burns are real but automatic and extremely small compared with total supply, making them a weak argument for near-term price support.
Regulatory progress and growing regulated investment options provide counterweights to the bearish technical picture, so a temporary move below $1 would not necessarily establish a longer-term downtrend.

This article was made with AI assistance and human editing.

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