XRP may be preparing for a new upward move as several market indicators start to align. Recent derivatives data and on-chain activity suggest that bearish traders could soon face pressure if the price begins to rise. Analysts believe this setup could trigger a bullish reversal in the coming weeks.
At the moment, XRP trades between $1.35 and $1.40. Meanwhile, the open interest weighted funding rate in perpetual futures markets has dropped below zero. This shift shows that many traders currently expect prices to fall.
However, negative funding rates often create the opposite outcome.
Negative Funding Rates Could Trigger a Short Squeeze
When funding rates turn negative, short sellers must pay fees to keep their positions open. This situation signals strong bearish sentiment in leveraged markets.
Paradoxically, such conditions often create bullish opportunities.
If XRP begins to climb, traders holding short positions may rush to close them. That sudden buying activity can trigger a short squeeze. As a result, prices may rise quickly.
Traders saw similar market behavior in previous cycles. Funding rate dips in 2024 and 2025 both preceded notable XRP price rebounds.
Technical Charts Show Strengthening Structure
Technical indicators also support the possibility of a rebound. Chart watchers recently spotted a cup and handle pattern forming on XRP’s price chart. Many traders consider this pattern a bullish continuation signal.
At the same time, the Relative Strength Index shows bullish divergence. This signal suggests that selling pressure is fading while the asset consolidates.
Key price levels traders are watching include:
- $1.40 as the first breakout resistance
- $1.48 as confirmation of bullish momentum
- $1.70 as a potential upside target if the rally continues
- $1.27 as a critical support level
Whale Accumulation Adds to Bullish Outlook
On-chain data provides another optimistic signal. Large XRP holders have reportedly accumulated about 140 million tokens in a short period. The value of this purchase approaches $200 million.
Furthermore, exchange outflows have increased. This movement suggests investors are moving tokens into private wallets instead of preparing them for sale.
For now, XRP remains in consolidation. Still, negative funding rates, whale accumulation, and strengthening technical patterns suggest a pivotal move could be approaching.
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