XRP’s funding rates on Binance have turned negative, indicating that more traders are currently betting against the asset. This development points to a market setup that could trigger significant short-term movements if buying pressure increases.
Crypto commentator Xaif (@XaifCrypto) drew attention to this trend with a chart showing the funding rates alongside XRP’s USD price.
XRP funding rates on Binance are negative.
That means more traders are betting against XRP (shorts).
When too many people short, even a small move up can force them to close.
This often leads to a bounce or short squeeze.Keep an eye on it. $XRP pic.twitter.com/GsHJeWZENI
— Xaif Crypto🇮🇳|🇺🇸 (@Xaif_Crypto) January 22, 2026
XRP’s Negative Funding Rates
The chart shows periods where funding rates dip below zero, signaling that short positions dominate the market. Xaif noted, “That means more traders are betting against XRP (shorts).” Negative funding rates suggest that traders who hold long positions receive payments from short sellers, reflecting the cost of borrowing XRP to maintain short positions.
The chart shows multiple clusters of negative funding rates over the last several months. These areas, particularly those in mid-2025 and late 2025 into early 2026, demonstrate heightened short-term activity. Historically, when short positions accumulate to this degree, even modest upward price movements can force traders to close their positions, creating a rapid price rebound.
XRP Price Response to Market Pressure
The chart links funding rate trends with XRP’s price movements. While XRP sometimes showed consolidation, spikes in funding rate activity correspond with notable price surges. XRP showed this activity in late 2024 before the 500% rally and in mid-2025 before its run to a new all-time high.
When the market faces an excess of shorts, any buying pressure can accelerate upward price movements. Xaif emphasized this dynamic, noting, “When too many people short, even a small move up can force them to close. This often leads to a bounce or short squeeze.”
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Short Squeeze Potential
The current negative funding rates suggest that XRP could be positioned for that short squeeze. Traders holding short positions may be vulnerable if buying momentum increases.
A short squeeze occurs when traders are compelled to buy back the asset to cover their positions, amplifying price growth in the process. This makes monitoring funding rates crucial for understanding potential market behavior.
XRP’s funding rates, combined with its price trends, indicate a market environment in which positioning imbalances could trigger significant movements. Observing these patterns provides insight into potential price acceleration points. Traders who track funding rate changes can gain an advantage in anticipating market responses, particularly during periods of concentrated short activity.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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