Ripple’s (XRP) traders on Perpetuals markets just produced a rare anomaly. The OI-weighted funding rate slipped into negative territory yesterday, raising the odds of an incoming short squeeze. Simply put, a negative Open Interest (OI)-weighted funding rate on XRP’s Perpetual crypto trades implies that crypto bears are paying the bulls to maintain their leveraged positions.
Is XRP’s Short Squeeze Loading After $2.50?
This could be understood as overly-pessimistic approach that typically leads to a short squeeze. This psychological phenomena happens when XRP coin’s price holds steady or even goes up, while crypto traders keep placing downwards price plays on Futures markets.
In the case of an unexpected XRP price rise, short-sellers would have to keep on adding margin to their price plays, with high-leveraged positions flushed away immediately. The cascading effect on XRP’s price due to this short squeeze can manifest itself with buying power, as it pushes the short-sellers out quicker.
Right now, Ripple’s native coin is loading up towards $2.50, a key psychological threshold that could pave the way for the short squeeze as well as an imminent rebound beyond the $3 price tag. On Wednesday, XRP’s Futures trading demand edged the Spot markets by more than four times, $7.80 billion to $1.66 billion.
This shift to speculative demand aligns with the sky-high Futures markets trading volumes, but the 24-hour liquidation data is crystal clear: bulls are still losing to the bears, but within a small distance. With $6 million liquidated in XRP longs, the short-selling crypto price registered $5 million in liquidations.
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People Also Ask:
It’s when XRP’s price jumps, forcing traders who bet against it (shorts) to buy back, pushing the price even higher!
Negative funding means more traders are betting XRP will drop, but if the price holds steady, it can trigger a short squeeze.
A short squeeze could send XRP soaring past $2.50 or even $3.00, as shorts scramble to cover their losses.
Maybe! Watch for the price to hold above $2.5 —then it could be a chance to jump in, but do your homework first.
Keep an eye on funding rates, price stability, and X posts for signs of a squeeze—stay informed and start small!
