[DigitalToday reporter Yoonseo Lee (이윤서)] XRP is seeing buying positions increase even as the broader market falls, adding to concerns about increased short-term volatility.

On June 6 (local time), blockchain media outlet The Crypto Basic reported that the trend is raising the risk of a long squeeze in the near term.

The key point is that risk exposure increased even as XRP's price fell. CryptoQuant analyst Phelineye said the estimated leverage ratio rose to 0.18 from 0.13 as XRP fell to about $1.17 from about $1.40.

He viewed rising leverage despite falling prices as a negative sign. That is interpreted as meaning market participants are taking on greater risk rather than shifting to a wait-and-see stance.

Market structure was also presented as unstable. Funding rates mostly stayed negative, indicating short-selling demand remained strong, but XRP failed to produce a clear rebound on the back of that. Funding rates being negative can typically help a price recovery, but this time the price response was weak, which was read as a sign the market itself has yet to gain strength.

In this situation, the possibility of a long squeeze increases. With leveraged long positions accumulated, even a small additional drop in price could trigger cascading liquidations. Phelineye said many traders are expecting a trend reversal, but the market is not yet supporting that sentiment.

Volatility indicators were also cited as warning signals. XRP's average true range (ATR) remains near past lows, leaving price moves very narrow. Phelineye said such zones often appear just before a big directional move, and that based on the current signals alone, the next move carries more weight to the downside than the upside. When low volatility and high leverage appear together, sharp price swings can occur, he said.

By price level, the $1.10 to $1.15 range was presented as first support. Below that, $1.00 was cited as psychological support. XRP then actually fell further to hit an annual low of $1.04, before a slight rebound as buying flowed in around $1.

That shifted the market's focus to whether the $1 level will hold. With XRP already having lost the $1.10 to $1.15 support range, if $1 breaks, fear-driven selling could expand and accelerate the pace of declines.

Still, the assessment was that confirmation signals for a bottom have yet to appear. Phelineye said a stronger recovery would first require leverage to fall, and that funding rates need to pass through a deeper negative zone and then normalise. He also said XRP needs to regain and hold the $1.10 to $1.15 range. Until those conditions are met, the XRP market is unlikely to escape the risk of further declines.

XRP Long Trades Increase, Strengthening Long Squeeze Possibility At first glance, it can be seen that leverage use has risen again as the price falls. #XRP price has retreated from about $1.40 to the $1.17 area. The Estimated Leverage Ratio has risen from 0.13 to 0.18 in recent weeks... pic.twitter.com/sKKSSZYxFp