XRP funding stays negative after 27% rally, mirroring 2025 setup before 126% surge

XRP perpetual funding rates have stayed in negative territory through a 27 per cent rally over the past two weeks, a divergence between price and positioning that on-chain data tracked by CoinGlass shows is historically rare. The token traded near $1.78 in Asian hours on Friday, up from a late-April low of about $1.40, while perpetual futures across Binance, Bybit and OKX continued to print negative weighted funding.

The setup mirrors April 2025, when XRP funding turned sharply negative as the token bottomed near $1.60. Over the following three months, XRP rallied 126 per cent to a July 18 high of $3.62 as crowded short positioning unwound. Traders watching the parallel say a similar short-squeeze mechanic is the bull case for the next leg, though the comparison carries caveats around macro conditions, exchange-traded fund flows, and the May 14 debut of XRP futures on Russia’s Moscow Exchange. The catalyst that flipped 2025 sentiment, the Securities and Exchange Commission’s settlement with Ripple Labs, has no obvious 2026 equivalent.

What the funding rate is signalling

Funding rate is the periodic payment between long and short holders of a perpetual futures contract. When the rate is negative, shorts pay longs to keep their positions open, a structural sign that selling pressure dominates the derivatives market. CoinGlass weighted funding for XRP dropped to minus 0.028 per cent on February 13, a 10-month low, and has spent 31 of the past 39 days in negative territory according to the firm’s accumulated funding tracker.

What makes the current configuration unusual is that funding has stayed negative through a price advance, not just a decline. That combination implies traders shorted the rally rather than chasing it, leaving open interest skewed against the move. CryptoQuant analyst Arab Chain wrote on the firm’s QuickTake feed that positioning reflected “a clear move toward defensive positioning” even as spot demand absorbed offers.

Per-venue data tracked by CoinGlass shows the divergence is broad. Binance, Bybit, OKX and Bitget all printed negative weighted funding through the first week of May, with Binance’s eight-hour rate ranging from minus 0.005 per cent to minus 0.018 per cent. Smaller venues including Bitfinex and BitMEX, where open interest sits at $4.3 million and $3 million respectively, registered similar reads. The breadth of the negative print is what separates the current setup from typical mid-rally dips, which usually clear within one or two funding periods.

The 2025 analog

The reference point traders are leaning on is April 4, 2025, when XRP funding hit comparable levels with the token at roughly $1.60. The Securities and Exchange Commission’s settlement with Ripple Labs in early May 2025 acted as the catalyst that flipped sentiment, and the resulting short squeeze drove XRP to $3.62 by July 18, a 126 per cent move. Open interest on Binance peaked near $270 million during that run before unwinding through August.

Open interest today sits at $203 million on Binance, down from a $670 million peak in October 2025, according to CoinGlass. The drop reflects the leveraged-long unwind that took XRP from $2.90 in October to $1.40 in April. CryptoQuant strategist Darkfost said in a research note that “the market tends to move against a late consensus,” arguing that the late-2025 build-up of leveraged shorts looks structurally similar to early-2025 conditions before the squeeze.

What is different this cycle

Three structural differences complicate a direct read-across. The first is the spot XRP exchange-traded fund complex, which launched in mid-November 2025 and pulled in more than $1 billion of net inflows in its first month. ETF inflows snapped their longest streak of 2026 in late April and have since resumed at smaller volume, with one week registering $55.4 million according to issuer disclosures. That base of passive demand was absent in 2025 and changes the path of least resistance higher if a squeeze develops.

The second difference is the macro backdrop. Bitcoin is trading above $80,000 against an April 2025 print closer to $63,000 to $65,000, which lowers the relative-value pressure on altcoins competing for the same risk capital. Federal Reserve policy expectations, currently anchored around the nominee Kevin Warsh, are tighter than 12 months ago, with markets pricing roughly two cuts through year-end versus three to four at the equivalent point in 2025.

The third is the Moscow Exchange futures listing. MOEX will publish a daily XRP index from May 13, with cash-settled MOEXXRP futures available to qualified investors from May 14, and contracts on Solana and Tron going live on the same day. The new instruments are settled in roubles and do not involve token delivery. Russian institutional flow into XRP via that channel is incremental rather than transformational, but it adds a positioning wildcard that did not exist during the 2025 rally and may compress weekday liquidity around index publication windows.

How traders are positioned

Santiment’s social-volume tracker shows XRP-related discussion well below the levels that accompanied the 2025 short squeeze, a quieter sentiment backdrop than the four-month bullish-talk spike the firm warned about earlier this week. Long-short ratios on Binance and Bybit have hovered near parity through the 27 per cent advance, supporting CoinGlass’s read that the rally has been led by spot rather than leveraged positioning.

Short-side liquidations have remained modest. CoinGlass logged $457 million of XRP-leveraged-position losses across the five months from October 2025 through March 2026, the bulk of which came on the way down rather than during the recent recovery. Holder-accumulation data from CryptoQuant identifies the $1.76 to $1.80 range as a structural resistance zone, with roughly 1.85 billion XRP picked up at those levels through 2025 and early 2026. A clean break above $1.80 is the level most desk notes are watching for confirmation that shorts are starting to capitulate.

CME XRP futures, which were extended to a 24-hour trading schedule in late 2025, have not registered the same negative funding skew as offshore venues. That divergence between regulated US-domiciled futures and offshore perpetuals is consistent with the spot-led tape, since CME contracts attract more directional macro flow and less of the leveraged short-bias retail positioning that dominates Binance and Bybit perpetuals.

Caveats and what would invalidate the setup

Funding-rate divergences do not guarantee outcomes. The April 2025 analog needed a discrete catalyst, the SEC settlement, to convert crowded short positioning into a sustained rally. Without an equivalent shock this time, negative funding can persist for weeks while price grinds sideways. CCN noted in a recent piece on the same setup that XRP’s drawdown of about 64 per cent from its all-time high reduces the urgency for shorts to cover at any specific level.

The downside scenario from current levels is a retest of $1.27 support, with $1.10 the deeper level traders are watching, according to CoinGlass open interest concentration data. A failure to clear $1.80 within the next two weeks would weaken the 2025 parallel, which broke clear of equivalent resistance within roughly 14 days of its bottom. A return to deeply negative funding without a price response, the configuration that prevailed through much of February and March, would suggest the squeeze thesis has decayed.

For now, the divergence between funding and price is the cleanest single signal in the XRP derivatives market, and it is the one traders will be watching ahead of next week’s Moscow Exchange launch and any incremental SEC or Ripple-side news that could replay the 2025 catalyst structure.