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In the XRP (Ripple) derivatives market, the funding rate plunged nearly 80% in a single day, signaling a sharp concentration of bearish bets.
According to cryptocurrency media outlet Finbold on February 19 (local time), XRP’s daily funding rate fell by about 80% from the previous day, entering deeply negative territory. A negative funding rate means that short position holders are paying fees to long position holders, which is interpreted as a sign that bearish positions are dominating. At the same time, real-time data from CryptoQuant showed that open interest declined by 5.35%, confirming an overall reduction in positions across the derivatives market.
The funding rate is a key indicator reflecting the balance between long and short positions. The deeper it moves into negative territory, the more it suggests the market is betting on further downside. However, excessive concentration in short positions also raises the possibility of a short squeeze—buying pressure triggered by the liquidation or covering of short positions. Notably, during the 2022 FTX crisis, a prolonged period of deeply negative funding preceded the formation of a cyclical bottom for XRP.
Spot price action has also remained under pressure. As of the time of writing, XRP is trading at $1.42, down 3.66% on the day. The price has fallen below the 7-day simple moving average (SMA) of $1.45 and the 61.8% Fibonacci retracement level of $1.46, losing short-term support. The 14-day Relative Strength Index (RSI) has dropped to 39, nearing oversold territory.
Market sentiment has also weakened. The Crypto Fear & Greed Index stands at 11, indicating “Extreme Fear,” while Bitcoin (BTC) dominance has risen to 58.15%, showing that capital is flowing into larger assets rather than altcoins. This trend is adding supply-demand pressure across the altcoin market, including XRP.
In the short term, reclaiming the $1.45–$1.46 range is expected to serve as the first signal of a potential rebound. Until that resistance zone is convincingly broken, bearish momentum indicated by funding rates and technical indicators is likely to persist.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses resulting from its use. The content should be interpreted solely for informational purposes.*