XRP News Today: Ethereum XRP Funding Rates Surge Despite On-Chain Activity Concerns

Ethereum (ETH) and XRP have recently posted the highest funding rates among all Layer-1 blockchains, with ETH at 0.0083% and XRP at 0.0093%. This surge in funding rates suggests a strong bullish momentum, as traders are aggressively taking long positions and paying a premium to maintain these positions. However, a closer examination of the data reveals a more nuanced picture.

On one hand, the bullish sentiment is driven by several factors. For Ethereum, the hype around ZK-rollups, Layer 2 scaling, and the potential approval of an ETF continues to dominate headlines. Similarly, XRP traders are optimistic following Ripple’s legal victory and the growing speculation around an XRP ETF in 2025. These factors contribute to the positive funding rates and indicate a strong long bias in the market.

However, the on-chain activity tells a different story. Ethereum continues to struggle with high gas fees, which has slowed down flows and resulted in a decrease in daily active addresses. Despite a solid 24-hour volume of $2.6 billion, the lack of follow-through on-chain suggests that the excitement is not translating into organic user growth. Similarly, XRP’s price is at $2.19, but the number of daily active wallets has decreased by 34.3%. While the on-chain volume surged by over 637%, this is often a sign of short-term whale activity rather than organic user growth.

The disconnect between price and volume raises concerns about the sustainability of the current trend. The main risk is over-leveraged longs, where elevated funding rates and stagnant prices create a setup for sharp liquidations. If a surprise selloff occurs, all those long positions could unwind quickly, especially since technical indicators for both ETH and XRP still look bearish and hover near oversold zones.

For Ethereum, the lack of a fresh institutional catalyst, such as a spot ETF approval or real momentum behind ZK rollup adoption, could lead to a volatility spike and catch leveraged longs on the wrong side. Similarly, if the ETF chatter around XRP fizzles and the hype can’t hold the price above key supports, a lot of leveraged longs could be forced to exit in a panic.

In conclusion, while the funding rates indicate bullish sentiment, the underlying activity does not fully support this trend. Traders should be cautious and watch for institutional activity and headlines that could drive the market. It is essential to avoid overexposure and be prepared for potential volatility, as the market could move fast and not everyone will be on the right side of that move.