The tension that defined the XRP Bitwise XRP ETF a week ago has largely unwound: the shorts that piled in during late September have been covering rapidly, even as the fund itself has given back some of its recent gains.
The reversal in short interest is the defining story of the past week. Short interest peaked near 14.4% of the free float on September 22, the level flagged in last week's note as an unusual build against a sharply rising fund. It has since collapsed. By September 29, short interest had fallen to roughly 4% of the free float, down 45% on the week and 60% over the past month. That is a dramatic cover across just five sessions. The ORTEX short score has tracked the retreat, dropping from a peak of 49 to just 29, back in line with the low-tension readings that prevailed through most of September. Shorts came in, they lost, and they left.
Borrow conditions confirm the de-escalation. Availability has loosened from the tight 147% reading that characterised the squeeze peak on September 22 to over 2,000% now, meaning roughly twenty shares are available in the lending pool for every one currently borrowed. Cost to borrow has also eased, falling to 2.2% from 2.7% a week ago and from above 4% a month back. The 52-week minimum for availability was 5.7%, so the current reading is almost as loose as the market gets. There is no residual stress in the lending pool.
Options positioning is the one angle that has not yet fully normalised. The put/call ratio has climbed to 0.27, nearly 1.8 standard deviations above its 20-day average of 0.18. That is still well below the 52-week high of 0.33, but the move is notable given how call-heavy this ETF's options flow has historically been. The PCR shift broadly tracks the shift in the broader investor base: enthusiasm for XRP exposure persists, but a pocket of hedging demand has appeared after the fund's sharp run.
On price, the fund closed at $16.69 on September 29, up 0.8% on the day but down nearly 6% on the week. The one-month picture remains positive, up around 8%, and the prior week's 23% surge still anchors the recent range. The sharp intraday short build on September 22 coincided almost exactly with the price peak, suggesting that aggressive short sellers were fading a momentum move rather than expressing a fundamental view on XRP.
The combination of loose borrow conditions, a deflated short score, and a modest options hedge tells a more settled story than last week's note. What remains worth watching is whether options hedging persists or fades as the one-month gain either consolidates or erodes further, and whether a fresh catalyst in XRP's broader regulatory or institutional backdrop prompts another positioning cycle in the ETF.
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