XRP News Today: XRP Funding Rate Plummets to -20% as Bulls Test Support at $2.00

XRP derivatives markets are flashing a potential buy signal as the funding rate for perpetual futures dropped to -20% on Thursday, the lowest level since the October 10 crash according to Cointelegraph. This deeply negative rate suggests that sellers are paying buyers to hold long positions, a rare indicator of weak bearish sentiment and limited demand for bullish exposure. Analysts are debating whether this is a temporary anomaly or a sign of possible price reversal in the near term.

The move comes as XRP dropped 9% over two days after failing to break above the $2.18 level. The decline pushed the token below the $2 psychological barrier, triggering a spike in the cost of leveraged bearish positions to a two-month high. Market participants are now closely watching whether this breakdown will be followed by further weakness.

Aggregate open interest in XRP futures remains stagnant at $2.8 billion, unchanged from the prior week, while leveraged positions have yet to recover the $3.2 billion level seen in late November. This data indicates a reluctance among bears to increase exposure, especially after XRP has already lost 45% since hitting $3.66 in July.

Market Dynamics and ETF Performance

The muted demand for bullish XRP positions is also linked to declining activity in US-listed XRP ETFs. Despite strong initial expectations, inflows and trading activity dropped sharply after just three weeks, leaving assets under management at $3.1 billion. This is lower than the $3.3 billion in assets held by Solana ETFs, suggesting that institutional and retail investors remain cautious about XRP's potential.

The 21Shares XRP ETF (TOXR), approved for listing on Cboe BZX Exchange, is set to begin trading soon. The fund will track the CME CF XRP-Dollar Reference Rate and charge a 0.3% annual fee. Ripple Markets currently holds all shares in the XRP trust, acquired at a cost of $226 million.

The ETF's launch is expected to bring additional capital to XRP markets, though it remains to be seen whether this will trigger a significant price rebound.

Institutional Interest and On-Chain Metrics

XRP ETFs have drawn $950 million in cumulative inflows since mid-November, marking 13 consecutive days of net positive flows. This suggests institutional investors are beginning to treat XRP as a legitimate asset class. However, XRP's price remains stuck in a tight range around $2.00, struggling to break above the $2.09–$2.10 resistance level.

On-chain metrics also paint a mixed picture. Exchange balances have dropped from 3.95 billion to 2.6 billion tokens over the past 60 days, indicating tighter supply. However, this has not translated into strong price performance, as XRP underperformed the broader crypto market by roughly 1% on Wednesday. Market makers have flagged rising distribution pressure above $2.10, suggesting that sellers are maintaining control.

Regulatory Clarity and Ecosystem Developments

The recent resolution of the SEC lawsuit against Ripple has been a key factor in the renewed interest in XRP. Bitwise's CIO, Matt Hougan, cited the end of legal uncertainty as the catalyst for the ETF launch, noting that XRP could now compete on a more level playing field. The firm's ETF attracted $25.7 million in trading volume on its first day, with $107.6 million in assets under management.

Regulatory clarity has also enabled broader institutional participation. Ripple's partnership with Gemini to support RLUSD on the XRP Ledger is another step toward expanding the token's utility according to CoinEdition. The integration allows for near-instant settlement and lower fees, positioning XRP as a viable infrastructure asset in cross-network transfers.

What This Means for Investors

Investors are now weighing the implications of the deeply negative funding rate and the mixed signals from ETF and on-chain data. While some analysts view the funding rate as a potential reversal signal, others caution that it may reflect a broader lack of conviction among bullish traders. The key question is whether XRP bulls will step in to defend the $2 support level or if further downward pressure will emerge.

At the same time, the growing institutional interest in XRP ETFs could provide a counterbalance to the bearish sentiment. If the 21Shares ETF and others see strong adoption, they may drive additional liquidity and price discovery for XRP. However, with the token still struggling to break out of a multi-month consolidation pattern, patience may be required for a meaningful move higher.