XRP, Funding Rate Long-Term Negative... 'Contrarian' Investment Strategy Surges

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An analysis suggests that XRP's funding rate has remained negative for an extended period despite price recovery, forming a contrarian pattern similar to just before the $3.6 rally in July 2025. The market is noting the possibility of a bullish reversal, given the continued dominance of short positions even as the price rebounds.

Cryptobasic reported on May 11 (local time), citing an analysis by CryptoQuant certified analyst Darkpost, that XRP's funding rate has been negative since February 2026. According to the article, XRP's price rose by approximately 27% during the same period, but the funding rate failed to recover to zero.

This trend appeared after a general correction in the altcoin market. The Total3 index, which tracks the total cryptocurrency market capitalization excluding Bitcoin (BTC), Ethereum (ETH), and stablecoins, decreased by over $544 billion during the correction. Subsequently, funds slowly flowed into the altcoin market from early February, increasing the Total3 market capitalization by approximately $125 billion.

However, in the XRP market, unlike the price recovery, investor sentiment remained bearish. Darkpost specifically pointed out that XRP's funding rate on Binance has maintained an unusually long negative period. This data reflects the funding rate trend over 30 days, showing that short positions dominated even while the price was rising.

The negative trend in XRP's funding rate began after its price dropped to $1.1 in early February 2026. Although XRP subsequently rebounded, the funding rate failed to turn positive. Darkpost analyzed that if a majority of traders take the same bearish position after a drop of over 60%, it could be a sign that a bullish reversal is approaching.

Cryptobasic explained that a similar trend occurred in April 2025. At that time, XRP traded around $1.25 after a significant drop, and the funding rate turned negative for the first time in at least 16 months. XRP's price began to recover afterward, but the funding rate remained negative for an extended period until June 2025.

As the recovery strengthened, XRP entered an upward trend, and the bullish trend was already underway when the funding rate turned positive. This movement led to a 126% rally, with XRP's price reaching $3.6 in July 2025. Cryptobasic stated that a similar contrarian pattern is again forming, with price recovery and capital inflow occurring together while traders maintain a bearish outlook.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*