XRP has climbed roughly 27% since hitting a low of $1.10 in February, but the rally comes with an unusual backdrop: funding rates on Binance have stayed negative since February, and short positions have dominated the token for a full 30 days — the longest such streak in recent history. The divergence between rising prices and persistently bearish sentiment has caught the attention of on-chain analysts, who see echoes of the pattern that preceded XRP's explosive 126% run to an all-time high of $3.6 in July 2025.
The pattern that caught analysts' attention
CryptoQuant analyst Darkfost pointed out this week that the current configuration — negative funding rates alongside a price recovery — looks a lot like what played out in April and May of last year. Back then, XRP traded near $1.25 with negative funding rates that stayed negative into June, eventually giving way to a rally that pushed the token past its previous record. The same divergence is showing up now: price is moving up, but the derivatives market is still betting against it.
Short sellers keep piling in
It's not a small positioning shift. The 30-day stretch of short dominance is the longest on record for XRP, according to the data. Negative funding rates mean longs are paying shorts to keep positions open — a sign that leveraged traders are overwhelmingly bearish even as spot buyers push the price higher. That kind of squeeze setup can get violent if the rally gains momentum. But it also means any pullback could accelerate as crowded shorts unwind.
Altcoins still reeling from the correction
The broader altcoin market had a rough start to 2026. The TOTAL3 index — which tracks the market cap of all crypto assets except Bitcoin, Ethereum, and stablecoins — lost over $540 billion during the downturn. Only about $125 billion has flowed back in since early February. That context matters for XRP's move: the token is recovering in a market where most altcoins are still nursing deep losses. Global uncertainty hit these assets harder than Bitcoin or Ethereum, and the path back hasn't been smooth.
The question now is whether the funding-rate pattern will repeat the July 2025 breakout — or whether the macro headwinds that crushed altcoins earlier this year will keep a lid on any sustained rally. XRP's next move could tell that story for the rest of the market.
