Negative Funding Rates Point to Potential XRP Reversal – Analyst

2026-01-22 15:23:44

Source: CoinEdition Original Title: Negative Funding Rates Point to Potential XRP Reversal – Analyst Original Link:

Overview

An onchain technical analyst has spotted a signal that could lead to a reversal in the XRP price trend. The analyst identified XRP’s current negative funding rates as a crucial indicator in the current market dispensation.

According to the analysis, 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.

Negative Funding Rates Have Historical Implications on XRP

Citing his analysis, the technical analyst compared the current situation to historical trends. A similar scenario, which occurred between August and September 2024, triggered a bullish run for XRP. Again, the event repeated itself in April 2025, during the notable price correction of that period.

For context, funding rates turned negative for a period before bullish rebounds. Such rebounds were driven by a shift in investor sentiment, returning funding rates to positive territory.

XRP traded for $1.94 at the time of writing, reflecting about 47% decline from its last high reached in July 2025. The record price resulted from an exceptional 600% rally from November 2024, after which the crypto market entered a phase of distribution and correction.

A Timely Bearish Consensus Suggests an Upcoming Rebound

In the meantime, the analyst has identified a unique trend that supports his projection: a timely bearish consensus that is forming after a drawdown of over 50%. This has developed into a predominantly short positioning on XRP, with funding rates mostly negative since December 2025.

The dominant short positioning reflects an accumulation of leveraged short positions. However, it is crucial to note that such a scenario does not create short-term selling pressure. Instead, it builds latent buying pressure, which informs the analyst’s prediction of a potential reversal in XRP price. According to the analyst, leveraged short positions stand a significant chance of becoming liquidated when the price begins to move up.

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