A key metric on Binance has turned negative for XRP, echoing a setup that preceded the token's 126% surge to $3.6 last July. Funding rates have stayed in negative territory since February, even as the asset climbed roughly 27% from a low of $1.10. That divergence between bearish trader sentiment and upward price movement has caught the attention of CryptoQuant analyst Darkfost.
The current negative stretch marks the longest such run in recent history for XRP, data shows. Short positions have dominated across a 30-day period, suggesting many traders are betting against further gains. Historically, such extended negativity has preceded sharp upward moves when sentiment eventually reverses.
The broader altcoin market is also showing life after a brutal start to the year. The TOTAL3 index, which excludes Bitcoin and Ethereum, shed more than $540 billion during the correction. Since early February, however, roughly $125 billion has flowed back into the index, pointing to renewed investor appetite.
If the pattern holds, XRP could be positioned for a move similar to its July rally. The token's ability to hold above recent lows while funding rates remain negative suggests sellers may be exhausted. A sudden squeeze higher would not be unprecedented.
The counter_argument: Crowded short positions can sometimes reflect rational hedging rather than pure bearish conviction. If negative funding persists without the anticipated breakout, it may simply indicate sustained selling pressure rather than a coiled spring ready to snap.