- XRP funding rates have fallen to deeply negative levels as bearish sentiment continues building across derivatives markets.
- Open interest and market capitalization have both declined, signaling weaker demand and reduced leverage.
- Analysts say similar funding conditions have preceded sharp rebounds before, though no reversal has been confirmed.
XRP continues to face heavy selling pressure as traders grow increasingly cautious about its short-term outlook. While the token has avoided falling to new cycle lows like many smaller altcoins, sentiment around XRP has clearly weakened over the past several months.
That growing pessimism is now showing up across derivatives markets.
Although XRP remains well above the lows seen across much of the altcoin sector, the token is still down roughly 70% from its July 2025 peak near $2.45. For many traders, the trend has been difficult to ignore.
Funding Rates Reveal Growing Bearish Sentiment
One of the clearest signs of caution is coming from Binance funding rates.
According to recent derivatives data, XRP’s 30-day aggregated funding rate has dropped into deeply negative territory. Funding rates help measure positioning between long and short traders, and sustained negative readings generally indicate that short sellers are dominating the market.
Analyst Darkfost noted that bearish positioning has remained consistent since the beginning of the year, suggesting traders have steadily leaned against XRP rather than expecting a recovery.
When sentiment becomes this one-sided, however, markets sometimes become interesting.
Historically, extremely negative funding rates following major corrections have occasionally marked important turning points. Darkfost pointed to April 2025 as an example, when XRP fell to roughly $1.25 before reversing sharply and eventually rallying around 126%.
That doesn’t guarantee history will repeat itself, of course.
Every market cycle unfolds differently, and while the current setup shares similarities with previous bottoms, traders are still waiting for stronger confirmation that selling pressure is beginning to fade.
Open Interest Continues Sliding
Funding rates aren’t the only metric flashing caution.
Open interest across XRP futures has fallen to approximately $350.6 million, one of the weakest readings seen in recent months.
A decline in open interest typically means traders are closing positions faster than new ones are being opened. In other words, participation is shrinking as investors become less willing to take on additional risk.
That’s rarely a sign of strong market conviction.
Instead, it often reflects uncertainty, with traders choosing to stay on the sidelines until a clearer trend develops.
Market Cap and On-Chain Activity Also Weaken
Analyst Pelinay highlighted another concern.
XRP’s market capitalization has reportedly declined to around $10.89 billion, suggesting that capital continues flowing out of the asset alongside falling leverage in derivatives markets.
At the same time, XRP’s Network Value to Transactions (NVT) ratio remains elevated at approximately 162.86.
The NVT ratio compares a blockchain’s valuation with the transaction activity taking place on its network. Higher readings generally indicate that network usage isn’t growing fast enough to justify the current valuation, potentially pointing to weaker underlying demand.
While the metric isn’t designed to predict short-term price movements, it does suggest that on-chain activity has yet to fully support a sustained recovery.
Is XRP Near a Turning Point?
Taken together, the data paints a cautious picture.
Bearish funding rates, declining open interest, lower market capitalization, and elevated NVT readings all point toward a market where risk appetite remains subdued. Sellers continue holding the upper hand, at least for now.
Still, crypto markets have a habit of moving against consensus.
Periods of extreme pessimism have occasionally preceded powerful reversals, particularly when most traders become positioned in the same direction. Whether XRP is approaching one of those moments remains unclear, but it is a possibility some analysts are beginning to watch more closely.
For now, traders appear content waiting for confirmation. Until stronger buying pressure returns, XRP is likely to remain caught between lingering bearish sentiment and hopes that the recent correction is nearing its end.
