Darkfost
Negative Funding Rates point to potential XRP reversal
XRP is currently trading around 47% below its last all-time high reached in July 2025. After an exceptional gain of over 600% since November 2024, the market has naturally entered a phase of distribution and correction. This type of movement is healthy after such a strong rally. What stands out is the timing of the bearish consensus. It did not form at the top, but rather after a drawdown of more than 50%. We now see a predominantly short positioning on XRP, with funding rates on Binance mostly negative since December, reflecting the dominance of leveraged short positions. Historically, the market tends to move against a late consensus. The accumulation of shorts does create short-term selling pressure, but it also builds latent buying pressure. If the price starts to rise, these positions could be liquidated, fueling the upward move. This pattern has occurred twice since 2024. Between August and September 2024, and again during the April 2025 correction, funding rates turned negative for a period before a bullish rebound took place, driven by a shift in investor sentiment and funding rates returning to positive territory. The current context suggests that XRP could once again follow a similar pattern, with the potential for a reversal supported by an excess of short positions.