XRP funding rate has seen a surprising upswing even as the broader cryptocurrency market endures fresh selling pressure. This unusual divergence has caught the attention of traders and analysts alike.
The crypto market has faced noticeable turbulence during the early Sunday trading hours, with a wave of sell-offs affecting major assets. XRP joined the list of digital currencies impacted, slipping 1.25% in value over the past 24 hours to trade around $2.06. Data reveals that crypto futures saw over $138 million in liquidations, and notably, short positions accounted for $90 million of that total.
Despite the bearish tide, XRP stood out with a key metric—its funding rate turned positive. This indicator, provided by CoinGlass, reflects a growing sentiment favoring bullish positions. A positive funding rate indicates that long contract holders are paying fees to shorts, suggesting optimism among market participants expecting a price increase.
This scenario implies traders are more eager to enter long positions, thereby bidding up the price of contracts relative to the actual market price of XRP. In turn, this dynamic results in a funding cost paid by longs, reinforcing the expectation of upward price momentum.
The interest in long positions could be pointing to a potential major shift in XRP’s movement. As seen from XRP’s recent price action, the crypto asset has stabilized after sliding to a local low of $2.03 on April 16. Since then, its range has narrowed, remaining locked between $2.03 and $2.12. Such patterns typically suggest a buildup before an imminent price breakout.
XRP/USD Daily Chart, Courtesy: TradingView
Adding to this speculative outlook is the observation that XRP’s 24-hour trading volume has dropped by 19% to settle at $1.39 billion. Lower volume during a consolidation phase often hints at reduced market participation before a larger price move unfolds.
Investors are now closely monitoring XRP’s key support at $2. Despite the current bearish setting, sellers have been unable to push prices decisively below this threshold. This resilience at the $2 mark can be interpreted as a lack of aggressive distribution by holders, opening room for buyers to reassert influence.
If bullish momentum does resume, watch for XRP to potentially test the 50-day simple moving average near $2.23. A successful breakout above this line could activate further price gains. Conversely, should bears take over and break through the $2 barrier, downside moves may target the next key support areas between $1.72 and $1.61.
Overall, while the broader crypto space encounters sell-offs, XRP’s positive funding rate signals an increasing appetite for risk among traders betting on a rebound. Market participants will be keeping a close eye on upcoming price action as the current consolidation sets the stage for the asset’s next move.
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