Is Short Dominance Over?...XRP Market Finally Shows Signs of Reversal

▲ Ripple (XRP) ©Go Da-sol

Even amidst a boring sideways trend, XRP (Ripple) is first sending 'reversal signals' in the derivatives market, increasing the possibility of a directional shift.

According to crypto media outlet Bitcoinist on May 1 (local time), XRP is currently maintaining a long-term range-bound movement around $1.35, but a clear shift in investor sentiment is being detected in the derivatives market. According to the Arabchain report, the 30-day moving average of Binance's funding rate has risen to 0.0002, marking its highest level since early February.

This is a significant change. For the past several months, the funding rate consistently remained in negative territory, dropping to as low as -0.0007, reflecting short position dominance, i.e., strong bearish sentiment. However, with the recent shift to positive and continued upward trend, it is interpreted that the market's expected direction is gradually changing, along with an increase in long positions.

In particular, the rise based on the 30-day average is considered a trend change rather than short-term noise. Generally, the derivatives market tends to move ahead of the spot market, suggesting that even when prices are stagnant, directional accumulation is likely underway internally.

However, caution against overheating remains. If the funding rate rises too quickly, an excessive accumulation of long positions could ironically trigger a sharp drop. While the current level of 0.0002 is considered an early stage of an uptrend, whether overheating occurs in the future is identified as a key variable.

The price structure remains range-bound. XRP is showing a converging trend between a support level of approximately $1.30 and a resistance level of $1.45, with trading volume also decreasing, indicating no clear dominance from buyers or sellers. A breakthrough of $1.45 could be interpreted as a signal for an upward reversal, but conversely, a breach of $1.30 would open up the possibility of a renewed decline.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*