Monero (XMR) Falls Sharply—Funding Rates Still Point to Bullish Sentiment - Crypto Economy

TL;DR

• Monero fell sharply and is now hovering around $353, breaking a rally that had doubled its value since April, driven by regulatory and technical expectations.
• Open interest in Monero futures jumped 20% over the same period, hitting its highest level since December, reflecting increased derivatives market activity despite the price drop.
• Funding rates remain positive, suggesting much of the market is still holding long positions, betting on a short-term rebound.

Monero is undergoing a sharp correction after several weeks of strong gains. In just three days, its price dropped from $420 to a low of $325. It’s currently trading around $353, down 9.5% in the last few hours. This pullback ends a rally that more than doubled its value since mid-April. The correction comes amid expectations of a technical upgrade and regulatory changes in the United States that had driven its price higher.

The drop hasn’t curbed investor interest. Open interest in Monero futures climbed 20% over the same period, reaching its highest level since December. These figures reflect increased activity in the derivatives market, as open interest measures the number of active contracts that remain open and unsettled.

Typically, a rise in open interest during a price drop would be associated with expectations of further declines. However, funding rates for Monero perpetual futures remain positive. This indicator represents the cost traders pay to hold leveraged positions, and positive rates confirm that most are still betting on a recovery rather than a deeper drop.

Monero Gears Up to Withstand the Impact of Quantum Technologies

This can be seen as a dip-buying strategy. Many traders are taking advantage of the temporary pullback to open long positions, anticipating a rebound in the coming days. This aligns with the uptrend Monero has maintained since April and with the interest surrounding the upcoming FCMP++ upgrade, which promises to enhance its resistance to quantum technologies and further improve transaction privacy.

This current dynamic contrasts with the pause seen in other cryptocurrencies, including Bitcoin, which has shown more moderate changes over the same period. Monero remains an appealing option for those prioritizing anonymity and control over financial information.

In the short term, the behavior of open interest and funding rates suggests much of the market expects a rebound. The way its price evolves in the coming days will confirm whether this recovery takes shape or if selling pressure continues