Crypto analyst Cryptoinsight has drawn attention to an “extremely interesting” price action for XRP. He highlighted the altcoin’s funding rates and spot volume, which provided insights into XRP’s recent downtrend, with its drop below the psychological $2 level. How XRP’s Funding Rates And Spot Volume Explain The Price Action In an X post, Cryptoinsight noted that open interest is rising significantly as funding flips heavily negative and the premium also continues to get more negative. In line with this, he remarked that leveraged players artificially created the move down for XRP. The analyst then pointed to the rise in spot volume, which is also significant. Related Reading: XRP’s 173-Day Theory: What Happens If This Historical Trend Plays Out Again The rise in the XRP spot volume is said to be happening just as the altcoin sweeps the recent wick into the year-long support at around $1.8, thereby creating a Bullish Divergence on the 4-hour chart. Cryptoinsight warned that the altcoin may have to drop a little further based on the hourly liquidity pools. However, the analyst is confident that a potential bounce for XRP from these price levels will be “quite violent” when it happens and will trigger a shortsqueeze back to the upside. Crypto analyst Darkfost also recently noted that there are predominantly short positions for XRP at the moment, with the funding rates on Binance mostly negative since December. The analyst stated that negative funding rates signal a potential reversal for XRP, and that any price rise could trigger several short liquidations, pushing the price much higher. A similar pattern is said to have played out twice for the altcoin since 2024. The first was between August and September 2024, while the second was in April 2025, with the price rebounding after the funding rates turned negative for a while. A Monthly Close Above $1.91 Is Key In an X post, crypto analyst ChartNerd said that XRP must close above its monthly 20 EMA at $1.91 this month. This came as he warned that, historically, after macro trends, closes below this EMA have signaled further decline. As such, the analyst declared $1.91 a fine line in the sand that market participants should be watching closely. Related Reading: XRP Price Recovery Is Possible If It Reclaims This Ichimoku Base A “great sign,” according to the analyst, is XRP’s breakout of its 3-week-long falling wedge resistance. With this breakout, the altcoin could be targeting $2.40, where the breakdown began after the falling wedge pattern formed. However, XRP is set to face key resistance between the $2.13 and $2.20 range. Meanwhile, ChartNerd assured that the altcoin’s fractal remains valid, with a rally to $27 still on the horizon. At the time of writing, the XRP price is trading at around $1.90, up over 2% in the last 24 hours, according to data from CoinMarketCap. Featured image from Vectorstock, chart from Tradingview.com
XRP is testing demand below the $2 mark as the crypto market struggles to find stability amid rising uncertainty. After weeks of choppy price action and failed recovery attempts, traders are watching whether buyers can defend this zone or if another wave of selling pressure will push XRP into a deeper pullback. The broader market environment remains fragile, and risk appetite has weakened, keeping volatility elevated across major altcoins. Related Reading: Bitcoin’s Power Shift: New Whales Now Control The Market XRP is currently trading around 47% below its last all-time high from July 2025, highlighting how far the price has retraced since peak bullish momentum. However, this move is not necessarily abnormal. After an exceptional rally of more than 600% since November 2024, the market has naturally shifted into a phase of distribution and correction, as early buyers take profits and late entrants are forced to de-risk. This type of cooldown is often needed to reset positioning and rebuild a healthier structure for the next trend. The current range suggests XRP is transitioning into a more balanced market where demand and supply are attempting to re-align. If buyers continue to step in near key support levels, the correction could evolve into a longer consolidation phase. Negative Funding Rates Hint At A Potential XRP Reversal Darkfost argues that what stands out in the current XRP setup is the timing of the bearish consensus. Instead of forming near the top, bearish positioning intensified only after XRP had already suffered a drawdown of more than 50%. Suggesting traders may be leaning short late in the correction cycle. On Binance, funding rates have remained mostly negative since December, reflecting a market dominated by leveraged short exposure rather than confident dip-buying. Historically, markets tend to punish late consensus. While a buildup of shorts can add near-term selling pressure and keep price capped during weak conditions, it also creates latent buying pressure through forced covering. If XRP starts to reclaim key levels, short liquidations and rapid position unwinds can accelerate upside moves. Turning bearish positioning into fuel for a rebound. Darkfost notes that this pattern has already appeared twice since 2024. During the August–September 2024 period, and again throughout the April 2025 correction, funding rates flipped negative for a sustained stretch before price stabilized and pushed higher. In both cases, the reversal was accompanied by improving sentiment and a return of funding rates toward neutral and then positive territory. With funding still tilted bearish and positioning crowded to one side, the current context suggests XRP may be approaching another inflection point. If demand re-enters the market, the imbalance in shorts could support a sharp recovery. Related Reading: Ethereum Supply Tightens On Binance As Reserves Hit Lowest Level Since 2016 XRP Consolidates Below $2 As Bears Lose Momentum XRP’s 3-day chart shows the downside momentum has clearly slowed from the attempt to stabilize the price after an extended corrective phase. XRP currently trades near $1.94, holding above a local support zone that formed after the sharp sell-off in Q4 2025. While sellers remain active, the downside momentum has clearly slowed compared to the aggressive breakdown that pushed the market from the $2.60–$2.80 region into the current demand area. From a trend perspective, XRP is still capped by declining moving averages. The shorter-term curve is sloping downward and acting as dynamic resistance near the $2.10–$2.30 range. Each rebound attempt has struggled to reclaim these levels. Reinforcing that the market remains in a broader downtrend despite the recent bounce. Related Reading: Binance Order Flow Suggests Ethereum Is In Correction Mode: Demand Still Missing However, the current price structure suggests sellers are losing control, as the market has stopped printing lower lows and is shifting into a tight consolidation range. If XRP reclaims $2, it could open the door for a stronger recovery move toward the $2.30–$2.50 zone. On the downside, losing the $1.85 floor would likely trigger renewed selling pressure and extend the correction. Featured image from ChatGPT, chart from TradingView.com