XRP Funding Levels Drop To Extreme Negative Levels, What This Means For Price

Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. XRP’s derivatives markets are still showing signs of bearish pressure,with funding rates across major exchanges now in negative territory. According to real-time data, funding rates have been predominantly below zero in recent trading sessions, with the lowest exchange funding rate recorded around -0.0748%. 

At the same time, open interest has returned to levels associated with long-term base zones in previous years. Could this environment lead to a turning point,or is further downside still unfolding for XRP’s price action? Bearish Derivatives Positioning Shows In Deeply Negative Funding

Real-time funding metrics from Coinglassreveal that XRP’s average funding across major exchanges has dipped into negative readings, and several crypto exchanges are on bearish rates. At the time of writing, the lowest funding observed is at -0.0748%, which is a clear indication that short positions are currently dominating sentiment. Related Reading Analyst Reveals What XRP Price Will Move Toward In Bid For $4 1 day ago

Negative funding ratesmean that perpetual futures shorts are paying longs, and bearish bets outweigh bullish ones across exchanges. In practice, heavily negative funding can reflect overcrowded short exposure. However, this is a condition that sometimes precedes sharp rebounds if the price begins to stabilize, as short sellers may eventually be forced to cover. Source: Chart from Coinglass on X

Technical analysis posted on thesocial media platform X by crypto analyst Osemka shows that XRP’s aggregated funding rate, weighted by open interest, is in deep negative territory on a weekly timeframe. As it stands, this metric is now at its lowest level since late 2022, only bested by the week of the November 2022 FTX crash. However, the interesting thing is that the prolonged period of negative funding back then marked a bottom in 2022.  Open Interest Returns to Multi-Year Base Levels

Open interest has also dropped significantly alongside funding in negative levels.The weekly aggregated open interest metric is now sitting on levels associated with previous multi-year accumulation bases. This base, shown in the chart above, has been acting as the base level for open interest since October 2022. Each time open interest has revisited this zone since then, it has been followed by a rebound to higher levels. Related Reading XRP Funding Levels Drop To Extreme Negative Levels, What This Means For Price 1 hour ago

In terms of price action, XRP has been struggling to find a sustainable bottom because the wider crypto market is yet to turn bullish. As it stands, XRP now needs to hold above two intermediate supports. The first of these is around $1.45, where recent daily candles have registered wicks. Beneath this lies a larger demand area roughly spanning $1.15 to $1.30. 

On one hand, the negative funding rate points to bearish positioning stress, but history shows this has always occurred just before lows. At the time of writing, XRP is trading at $1.49, although it recently traded above $1.60 during the weekly open. A weekly close above $1.50 will be the first step to confirming a return to bullish momentum. XRP trading at $1.48 on the 1D chart | Source: XRPUSDT on Tradingview.com Featured image from iStock, chart from Tradingview.com