Derivatives traders targeting XRP have recently focused on the potential for a bear trap, following a notable spike in the Binance Funding Rate. Over the last 30 days, the cumulative Binance funding rate on XRP derivatives reached 0.18%, the highest reading in more than a year, drawing significant attention across the market.
Historical context for funding rate surge
Dark Frost, an analyst at CryptoQuant, reviewed historical patterns associated with these market shifts. He identified a similar structure just two months before XRP climbed to $3.55 in 2025. The 30-day rolling cumulative funding rate is especially relevant to swing traders, as it often coincides with price inflection points when XRP trades below all four major moving averages.
Traders are closely monitoring the $0.98 to $1 liquidity zone, which previously acted as support when XRP rebounded to $1.67 in August 2026. While this area remains a focal point for bullish derivatives positioning, decisive upside momentum may depend on increased whale activity in the spot market.
According to funding rate dynamics on Binance, sharp shifts such as the recent spike can often foreshadow trend reversals. Dark Frost explained on X that “Extreme readings in either direction can signal that traders are crowding into the same side of the market,” with the current 30-day cumulative figure illustrating several possible outcomes.
Extreme readings in either direction can signal that traders are crowding into the same side of the market, hinting at a possible reversal or increased volatility.
The data shows that prior peaks in bullish sentiment have matched local price tops, while highly negative funding rates were frequently seen near market bottoms. Currently, XRP is experiencing a 30% correction from its cycle high, a pattern reminiscent of a previous rebound in which the asset surged 53% after dropping to $0.70.
Bulls lose ground as bearish trend intensifies
CryptoQuant’s team points to the ongoing correction as evidence of the risks inherent in holding a bullish bias throughout a downturn. While derivative traders remain hopeful, the futures market data reveals that bullish traders have faced significant losses.
CoinGlass, a crypto analytics platform, reported that long positions in XRP have suffered $11.01 million in liquidations over the past 24 hours. All five major XRP trading platforms are displaying long-to-short ratios well below 1, emphasizing that bearish sentiment currently dominates the market.
On Wall Street, bearish sentiment is even more apparent. Spot XRP exchange-traded funds (ETFs) had one of their steepest sessions of the year, with daily net outflows totaling 9.37 million XRP, valued at $10.4 million. The combined ETF holdings shrank by $18 million in just two days, providing further momentum to the bearish outlook.
Mini dictionary: CoinGlass is a cryptocurrency analytics platform that provides real-time data on open interest, liquidations, funding rates, and other derivatives market metrics across leading crypto exchanges.
| Platform | Long/Short Ratio | Daily Liquidations (USD) |
|---|---|---|
| Binance | Below 1 | $11.01 million |
| Other major exchanges | Below 1 | Significant |
Recent ETF net outflows underscore how institutional sentiment continues to shift toward the downside, with overall holdings dropping significantly in a short period.
No formal comment has been issued from Ripple, the company behind XRP, in response to these latest market moves. XRP, a digital asset designed to facilitate fast and cost-efficient cross-border payments, remains under scrutiny as market participants look for signs of stabilization or renewed upside.
