XRP funding rates plummet 80% in a day

Daily XRP funding rates dropped nearly 80% on Thursday, February 19, showing continued pressure in the derivatives market.

Negative funding rates indicate that traders holding short positions are paying those going long, a sign that bearish bets currently outweigh bullish exposure. 

The unfavorable change was also accompanied by a 5.35% drop in open interest, per the real-time data available on CryptoQuant at press time.

As funding rates reflect the balance between long and short traders, negative readings in this metric further suggest that the market is betting on further downside.

What do negative XRP funding rates mean?

Deeply negative funding, however, can also signal overcrowded positioning. 

Historically, extreme short bias has sometimes preceded sharp reversals, especially when price action begins to stabilize, and short sellers are forced to cover.

For example, a prolonged negative funding environment ultimately marked a cyclical bottom for XRP in 2022, during the FTX crash.

Whether the setup will again lead to further downside will likely depend on broader market participation and spot demand returning in force.

XRP price struggles 

XRP’s spot price, however, also continues to struggle in the absence of broader market strength. At the time of writing, the cryptocurrency was trading at $1.42, having gone down 3.66% on the daily chart.

The pullback sent the asset below its 7-day Simple Moving Average (SMA) near $1.45 and the closely watched 61.8% Fibonacci retracement level around $1.46, which marks a clear loss of near-term support. Meanwhile, the 14-day Relative Strength Index (RSI) has fallen to 39, approaching oversold territory. 

Market sentiment likewise remains fragile, reflected in an “Extreme Fear” reading of 11 on the Crypto Fear & Greed Index. At the same time, Bitcoin (BTC) dominance stands at 58.15%, suggesting capital is consolidating into larger-cap assets rather than flowing into altcoins like XRP.

A recovery back above the $1.45–$1.46 zone would be the first signal that price action is stabilizing. Until then, short-term momentum favors the bears, as evidenced by the state of the funding rates.

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