XRP, the digital asset developed by Ripple Labs for cross-border payments, has come under renewed selling pressure as derivatives traders turn increasingly bearish. Binance, one of the world’s leading cryptocurrency exchanges, now reports funding rates for XRP at some of the most negative levels seen in recent months. The shift reflects a consensus among traders who are betting on further declines in the token’s price.
Bearish sentiment intensifies in derivatives market
Recent data from Binance shows that over a 30-day period, XRP’s funding rates have sunk into deep negative territory, indicating more traders are taking short positions. Funding rates serve as an indicator for market sentiment in perpetual futures trading by measuring whether traders in long or short positions are paying to hold those trades.
Analyst Darkfost commented that persistent negative rates demonstrate a clear change in outlook among derivatives traders, who now overwhelmingly expect lower prices for XRP in the near term. He pointed out that this bearish bias has remained in place since the start of the year, reflecting sustained uncertainty among market participants.
XRP funding rates have reached extreme bearish levels following a 70% price drop from its July 2025 peak, reinforcing negative sentiment across the altcoin market and showing traders’ widespread expectation of further declines.
History shows that periods of deeply negative funding rates may precede market reversals, as seen in April 2025, when XRP fell to $1.25 before recovering in a 126% rally. However, analysts caution that every cycle presents different dynamics, and traders remain alert to whether a similar turnaround could occur.
Market cap and open interest signal cautious outlook
Alongside extreme funding rates, open interest for XRP futures has dropped to $350.6 million, marking one of the lowest levels in recent months. Open interest tracks the total value of outstanding futures contracts and serves as an indicator of leverage and overall market engagement. The current decline suggests that many leveraged traders are reducing or closing their positions rather than initiating new bets.
Meanwhile, market capitalization for XRP has contracted to $10.89 billion. Analyst Pelinay noted that the shrinking market cap aligns with falling open interest, highlighting limited appetite among investors to hold or accumulate XRP at current price levels.
The NVT (Network Value to Transactions) ratio remains elevated at 162.86, indicating that XRP’s network activity has not grown sufficiently to support its market valuation. High NVT ratios can signal overvaluation when compared to actual on-chain use, raising concerns about the token’s current pricing relative to transaction volume.
Taken together, these signals point to a market where demand is subdued and risk exposure is being trimmed. As sellers maintain pressure, traders are keeping a close eye for any shift that could trigger a potential rebound.
| Metric | Current Value | Recent Trend |
|---|---|---|
| XRP Funding Rate (Binance) | Extremely negative | Decreasing |
| Open Interest (XRP Futures) | $350.6 million | Decreasing |
| Market Cap (XRP) | $10.89 billion | Decreasing |
| NVT Ratio | 162.86 | Elevated |
XRP’s move contrasts with about 40% of altcoins, many of which now trade near their all-time lows. Despite losing nearly 70% since its peak of $2.45 in July 2025, XRP remains above its historical minimum, though the trend in metrics such as funding rates and open interest shows traders expect more downside.
Derivatives traders remain deeply pessimistic about XRP as open interest and market cap decline, while network activity continues to lag and sellers keep downward pressure on prices.
Mini dictionary: Funding rate — In cryptocurrency futures, the funding rate is a periodic payment exchanged between long and short position holders depending on the difference between perpetual contract prices and spot market prices. Extreme negative rates indicate that traders holding short positions are paying those in long positions, reflecting heavy bearish sentiment.
