The price of XRP is in a weird tug of war right now, and frankly, it’s the kind of setup that rarely ends quietly.
Funding rates tell the first part of the story. It’s been negative for a while now, and not just moderately. We are talking about declines as deep as -0.01 and even -0.02. Short trades dominate the market, and long traders get paid to stay in the game. Structurally, it screams bearish positions.
Negative financing rates indicate a strong bearish market position structure
But XRP price is near $1.32, continuing its pattern of lower highs and lower lows. Usually, this goes well with bearish sentiment. Except this time, the decline is not driven by organic spot selling but is largely fueled by leveraged short positions.
This is a subtle but important difference. Share analyst PelinayPA It indicates fragility. Because when short positions become too dominant, the market becomes vulnerable to severe reversals.
ETF inflows rise while price continues weak downtrend
Also, during the period from March 23 to 27, XRP ETFs saw an inflow of +2.66 million. Institutional money is quietly but clearly intervening. So, what gives? Why is the price still falling?
basic. Difference. While institutions are accumulating, the broader market is still selling off.
This disconnect creates a scenario where a sudden upward move could trigger a series of short liquidations. But don’t get too comfortable. If this squeeze occurs, it could be offset by strong immediate selling from the same institutional players that are making gains. In other words, volatility is not only possible, but likely.
The collapse of liquidity via XRPL indicates a possible market collapse in the future
Then there is the problem of liquidity. AMM pool liquidity on XRP Ledger It shrank to $1.9 million, hovering near levels last seen before a previous big rally. But the context now looks different. Instead of building momentum, liquidity has been stuck in a flat line for 30 days.
DEX liquidity tells a harsher story. From the hype peak of $280 billion after ETFs, it has collapsed to $104.2 billion. This is not appeasement, it is retreat.
Add to this the increase in whale transactions to the stock exchange during the months of February and March, and it looks less like accumulation and more like distribution. The big players seem to be moving out, not in.
So, what’s next? the Ripple price It could be heading towards a deeper run, with potential downside targets in the $0.90-$0.75 range. Not pretty but consistent with my current setup.
However, if the price starts to rise while financing remains negative, then things quickly turn around. Until then, each bounce may be just another camouflaging trap for the XRP price.
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