XRP Funding Rates Turn Negative as ETF Vaults Hold Over 800 Million Tokens

TLDR:

• XRP funding rate stands at -0.00323 with both 30-day and 50-day moving averages trending sharply downward currently.
• Negative funding spikes historically mark local bottoms and precede relief rallies rather than sustained selling pressure.
• Over 800 million XRP tokens now locked in ETF vaults, approaching the 1 billion milestone mark in coming period.
• Short-heavy positioning creates favorable conditions as probability of upside movement exceeds downside breakdown risk.

XRP funding rates have turned negative, signaling short-heavy positioning in the derivatives market. 

This structure historically precedes relief rallies rather than continued downside pressure. Market analysts now view the current setup as constructive for potential upward movement in the near term.

Funding Rate Patterns Point to Compressed Market Structure

The funding rate for XRP currently stands at approximately -0.00323, with both the 30-day and 50-day simple moving averages trending downward. 

This configuration indicates that short positions dominate the leveraged trading landscape. When funding rates spike positively and form sharp peaks, prices typically move sideways or pull back sharply. 

The increasing cost of maintaining long positions raises the probability of a long squeeze during these periods.

Source: Cryptoquant

These positive spikes have functioned as warnings of market overheating rather than signals for trend continuation. 

Conversely, sudden negative spikes in funding rates often mark local price bottoms. When the funding rate SMAs break sharply lower, short positions accumulate and market sentiment turns excessively pessimistic. 

Strong negative funding has historically triggered short-term relief rallies as prices rebound from these compressed levels.

The absence of excessive optimism in current market conditions creates a favorable environment for upside moves. 

Sharp downside movements appear unlikely in the short term given the current positioning. Any pullbacks would more likely represent shallow retracements aimed at liquidity collection rather than sustained selling pressure.

ETF Vault Holdings Approach Milestone as Technical Setup Improves

According to ChartNerd, over 800 million XRP tokens are now locked in ETF vaults. The analyst noted that the 1 billion mark no longer seems distant, describing this development as inevitable. 

This accumulation in institutional vehicles occurs alongside the technical setup suggested by funding rate data.

The current funding data presents no obstacle to upward price movement for XRP. Instead, the structure appears to be building groundwork for potential advances after a period of market compression. 

While no clear signal for a major rally has emerged, the probability of upside movement exceeds that of a downside breakdown. 

If funding rates begin turning positive from current levels, the price may respond with upward momentum.

The combination of short-heavy positioning and growing ETF vault holdings creates an interesting dynamic. Leveraged traders have positioned for further declines while institutional accumulation continues. 

This divergence between derivatives positioning and spot demand often resolves with short covering as bears exit their positions. The technical framework supports this scenario more than continued weakness at present levels.

The post XRP Funding Rates Turn Negative as ETF Vaults Hold Over 800 Million Tokens appeared first on Blockonomi.

Source: https://blockonomi.com/xrp-funding-rates-turn-negative-as-etf-vaults-hold-over-800-million-tokens/