Crypto Market Bearish: Bitcoin, XRP, PEPE Down 35%

The current funding rates of mainstream centralized exchanges (CEX) and decentralized exchanges (DEX) indicate that the cryptocurrency market is still in a bearish trend. The funding rate is a mechanism used by exchanges to balance the contract price with the underlying asset price, typically applicable to perpetual contracts. It serves as a fee exchange between long and short traders, with the platform not charging this fee. The funding rate helps adjust the cost or profit of traders holding contracts to keep the contract price close to the underlying asset price.

When the funding rate is at 0.01%, it is considered the benchmark rate. A funding rate greater than 0.01% suggests a bullish market, while a rate less than 0.005% indicates a bearish market. The current funding rates for mainstream coins reflect this bearish trend, with many cryptocurrencies experiencing significant price declines.

Bitcoin, often seen as a benchmark for the broader cryptocurrency market, has been in a downward spiral since its peak in late 2024. The price has formed a classic lower-high and lower-low structure, a clear indication of a bearish trend. This downward movement is supported by the bearish outlook displayed by commercials in the futures market, who are hedging their bets while accumulating Bitcoin over-the-counter. Despite the long-term potential of Bitcoin, the near-term price action remains bearish.

XRP, another major cryptocurrency, has also been under significant pressure. The token has dropped by 35% since hitting a high of $3.40 in January, following a 500% surge in late 2024. The recent downtrend is attributed to various factors, including macroeconomic concerns such as tariff threats and rising inflation, which have intensified pressure on risk assets like cryptocurrencies. Additionally, the on-chain activity has weakened, and the growing supply of XRP adds further strain. Whale activity has also slowed, as seen in declining large transaction activity, suggesting weakened market confidence. Technical indicators further support a bearish trend, with a head-and-shoulders pattern identified on XRP’s chart, indicating a potential drop to $1.20 if the $2.05 neckline breaks.

The bearish trend is not limited to Bitcoin and XRP. Other cryptocurrencies, such as PEPE, have also been experiencing significant price swings, further indicating a bearish market sentiment. The lack of strong fundamentals or institutional interest may limit short-term gains for these cryptocurrencies, and if market sentiment does not improve, they could remain under selling pressure through the next cycle.