Will XRP lose the $1 mark? Polymarket’s 65% odds are forcing Ripple bulls to prove their case.
Prediction market traders currently assign about a 65% probability that XRP will finish August below $1. For many, that sounds alarmist. Yet the pricing is not coming out of nowhere: XRP is stuck in a tight consolidation, losing ground against competing majors like ETH, while leverage quietly builds up in derivatives markets.
At the same time, the network’s fundamentals are quietly improving, with on-chain activity and daily token burns providing a structural tailwind that could support a push toward $1.50 if sentiment flips. The battle between these opposing forces is what will define August for XRP.
XRP at a crossroads around $1
Over the last two months, XRP has essentially been orbiting the $1 level. July wrapped up with XRP at around $1.06, and early August price action has clung to roughly the same zone, forming a visible consolidation range.
Historically, such multi-week compression phases for XRP have often preceded strong directional moves. Bulls see this as the calm before a breakout higher, particularly as $1 has repeatedly acted as both psychological and technical support.
But a closer look reveals that this resilience is not as convincing when compared to other large-cap assets. On the higher timeframes (monthly and quarterly), XRP hasn’t completely broken down, but its relative performance is eroding. That context is key to understanding why a 65% chance of a close below $1 might not be simple fear-mongering.
XRP vs ETH: the relative performance problem
One of the clearest warning signals is the ongoing deterioration of the XRP/ETH ratio. After a brutal July, in which that ratio slid by more than 13% – its worst monthly drawdown this year – August has already shaved off another nearly 5%.
In parallel, the raw returns tell the same story. Ethereum finished July more than 18% higher, while XRP only managed a 2.18% gain. In other words, ETH’s monthly return has been nearly an order of magnitude stronger than XRP’s.
For a market driven by relative momentum and rotational flows, this matters. When Bitcoin stalls under resistance – as it has been doing – capital often rotates into whichever altcoins are displaying the best strength-versus-peers profile. At the moment, XRP is not on that list, and that makes it easier for traders to justify betting on downside, at least on a relative basis.
If the underperformance continues through August, the current 5% pullback in the XRP/ETH pair could simply be the opening leg of a larger relative correction. Under that scenario, prediction markets assigning a majority odds to a sub‑$1 finish start to look less like speculation and more like a rational reflection of the present risk-reward balance.
Leverage is rebuilding: pressure on $1 support
On-chain and derivatives data show that the test for XRP bulls is intensifying.
Open Interest (OI) on XRP futures has rebounded to around $2.5 billion, returning to levels seen in mid-July. That previous period provides a cautionary template: back then, buyers tried and failed to sustain prices above roughly $1.15. Their failure triggered a sharp liquidity sweep, with XRP dumping toward $1.03 in early August, while OI dropped to around $2.36 billion as leveraged positions were flushed out.
The current setup looks uncomfortably similar. Leverage is rising again into a key psychological support area. When that happens, the support level itself becomes a magnet for stop losses and liquidations. If bulls cannot convincingly defend $1 this time, another fast, wick-like move below the level is entirely plausible.
And that is precisely the type of event prediction market traders are pricing in: not necessarily a long-term collapse, but a failed defense of support and a sharp sweep under $1 before any potential recovery.
Deflationary tokenomics: a quiet but real tailwind
Despite these risks, XRP’s underlying tokenomics present a compelling longer-term counterweight to the near-term bearish bias.
Data over the last 206 days show that total XRP supply has fallen from 99,985,726,061 to 99,985,630,555. That’s a net burn of 95,506 XRP, averaging roughly 463 tokens destroyed per day. Among major layer-1 assets, this gradual but persistent reduction in supply is one of XRP’s stronger fundamental features.
In a purely mechanical sense, a shrinking supply helps support price over time, assuming demand remains stable or rises. It does not guarantee short-term upside – especially when macro conditions or relative flows are unfavorable – but it does make long, grinding downtrends harder to sustain without a major collapse in usage or sentiment.
The catch is that in the current environment, these burns appear less like a background, “invisible” deflationary mechanic and more like an important line of defense. With XRP lagging ETH and leverage again pressuring key levels, the steady decline in supply may be playing a role in cushioning volatility and preserving some holder value while the market searches for a new equilibrium.
XRPL activity is growing – and that matters
Alongside the deflationary trend, activity on the XRP Ledger is quietly moving in the right direction. The 7‑day average for active addresses has risen by about 8.1% over the past week, with roughly 15.2k addresses interacting with the network daily.
That growth in active addresses hints at increasing use of XRPL for payments, transfers, or other applications built on top of the ledger. Rising activity does not immediately translate into higher price, but it is often a leading indicator that developer and user interest is not fading, even during periods of uninspiring price action.
In combination with the continuous daily burns, this uptick in network engagement provides a fundamental floor under the narrative for XRP. Bulls can point to concrete metrics – more users, fewer tokens – to justify staying positioned for a medium- to long-term breakout, even if they accept that short-term downside volatility is likely.
Why prediction market odds matter – and where they can be wrong
Polymarket’s 65% odds for XRP closing August below $1 are not a forecast from an oracle; they reflect where money is currently willing to take risk on either side of the bet. That makes them valuable sentiment signals.
These markets aggregate the views of traders who have skin in the game, incorporating macro sentiment, risk appetite, and current technical structure. When the odds skew this heavily toward a downside threshold, it usually means the path of least resistance is perceived to be lower, at least in the near term.
However, prediction markets are not infallible. They can crowd around consensus narratives and be caught wrong-footed by:
– Unexpected macro news (for example, dovish central bank signals improving risk-on appetite);
– Regulatory or legal developments that favor XRP or the broader crypto ecosystem;
– Sudden rotations of “smart money” into lagging majors if they are seen as undervalued versus peers;
– Catalyst-driven spikes in XRPL adoption or major partnership announcements.
In those cases, a widely shared bearish bias can fuel a sharp short squeeze, especially when leverage is elevated. If traders are over-positioned for a break below $1 and that break fails, a move above $1.15-$1.20 could unfold faster than many expect.
Bullish scenario: what XRP needs to aim for $1.50
For XRP to challenge the $1.50 area in the coming weeks or months, several conditions would likely need to align:
1. Successful defense of $1
The first and most immediate requirement is for bulls to absorb sell orders and liquidations around the $1 mark. A firm bounce with rising spot volumes, rather than just derivative-driven spikes, would send a strong signal.
2. Improvement in relative strength vs ETH and majors
XRP doesn’t necessarily need to outperform ETH dramatically, but it must at least stabilize the XRP/ETH ratio and stop the bleeding. Flattening that downtrend could be enough to attract value-focused capital.
3. Continuation of XRPL activity growth
If active addresses continue to rise and on‑chain metrics show sustained or accelerating usage, it becomes easier to build a narrative around fundamental support for higher prices.
4. Controlled leverage and cleaner positioning
A partial flush of overleveraged long positions followed by steady rebuilding with tighter funding rates would create a healthier base for any substantial rally.
If these conditions converge, a retest of resistance zones above $1.30 and toward $1.50 becomes more realistic, especially in a broader risk-on crypto environment.
Bearish scenario: what a break below $1 could look like
On the flip side, if smart money continues to favor ETH and other leaders while XRP remains sluggish, the 65% odds of a sub‑$1 close could play out in a straightforward way:
– A rise in Open Interest into the $1 level increases the density of stops and margin calls;
– A sudden spike in selling volume – possibly triggered by macro risk-off moves or BTC weakness – slices through $1;
– Liquidations cascade, driving a quick wick to lower support areas, potentially in the $0.85-$0.95 range, depending on market depth;
– OI then contracts sharply as leveraged positions are wiped out, leaving spot holders and reduced leverage to rebuild a new base.
In that scenario, the breach below $1 might not last long, but it would technically validate the prediction market thesis and could dampen sentiment for some time, especially among retail participants.
How traders and investors can think about this setup
For short-term traders, the $1 level functions as a clear pivot. Strategies might revolve around:
– Range trading the consolidation until a decisive breakout or breakdown occurs, keeping tight stops around key levels;
– Fade-the-move setups, where a failed break below $1 or above recent highs provides an opportunity to trade the reversal;
– Relative value trades, such as positioning XRP versus ETH depending on how the XRP/ETH ratio behaves.
For longer-term investors, the focus tends to be less on whether August closes at $0.98 or $1.05 and more on:
– The persistence of deflationary tokenomics and how meaningful the burn rate could become if activity keeps rising;
– Structural adoption of XRPL as a payments and settlement infrastructure;
– The asset’s standing relative to other L1s once this phase of underperformance and consolidation passes.
In both cases, risk management remains essential. Cryptocurrencies are volatile by nature, and leveraged derivatives only amplify that. Regardless of the odds on any prediction platform, no outcome is guaranteed.
The bottom line: a market caught between pressure and potential
XRP enters the rest of August in a tightly balanced position. On one side, Polymarket’s 65% odds of a sub‑$1 close, XRP’s underperformance against ETH, and rising leverage all argue for caution. On the other, a deflationary supply curve and steadily increasing XRPL activity sketch a supportive fundamental backdrop that could underwrite a move higher once selling pressure exhausts itself.
For now, XRP is not in a fully bullish posture. Until smart money signals a clear pivot – either by aggressively defending $1 with strong spot demand or by driving a sustained reversal in the XRP/ETH ratio – the risk of another July-style liquidity sweep remains firmly in play.
Whether August becomes the month XRP finally turns the tide or confirms the bearish odds will largely come down to how the battle over the $1 level is resolved.