XRP is currently trading at $1.42, showing a slight increase of 1.21% over the past day. However, more substantial changes might be occurring in the futures and options market.
CryptoQuant analyst Darkfost recently pointed out on X (formerly Twitter) that the derivatives market could be positioning itself to punish those betting against the price of Bitcoin (short sellers).
Green Flag: Shorts Are Piling In
According to Darkfost, XRP funding rates on Binance are currently very negative. Even though the price has dropped about 60%, most traders are betting that the price will continue to fall by taking ‘short’ positions in the derivatives market, with the price fluctuating between $1.35 and $1.50.
In plain terms: the bearish trade is now crowded.
According to Darkfost, markets often move against what most people expect, especially when everyone agrees on a single outcome.
The Last Time This Happened, XRP Rallied
In April 2025, the amount of funding for XRP on Binance dropped sharply, indicating a very negative outlook. At the time, XRP was trading around $1.60. However, by mid-July, the price surged to $3.65 as traders who had bet against it were forced to buy it back, driving up demand.
According to Darkfost, past data from CryptoQuant indicates that when XRP funding rates become very negative, the price often bounces back quickly with a short-term increase.
This Isn’t a Guaranteed Reversal
Darkfost is cautious, and readers should be too. He points out that this situation doesn’t necessarily mean things will change permanently. It’s a development to keep an eye on, but it’s not a definitive sign of a turnaround.
The overall market remains unsteady. Increasing conflict between the US, Israel, and Iran – with reports of strikes and drone use – is causing investors to favor safer investments, which is leading to declines in riskier markets like cryptocurrency and silver.
Since the beginning of February, smaller cryptocurrencies besides Ethereum have collectively gained about $75 billion in value, but the market is still unpredictable.
What Would Lead to a Rally?
As a researcher, I’ve been closely following the CLARITY Act, and it’s currently generating a lot of attention. It’s potentially a very big deal for XRP because, if it becomes law, it would eliminate the final major hurdle preventing institutional funds from directly holding the cryptocurrency.
Just like in April 2025 – when a positive regulatory decision combined with an already undervalued market sparked a rally after the SEC reached a settlement with Ripple – the CLARITY Act could be the catalyst for a similar market surge now.
Whether a catalyst arrives to trigger that setup remains the key question for XRP in March 2026.
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2026-03-05 12:36