The price of XRP recently showed a degree of resilience, managing to return to around $1.5 over the weekend, reflecting a nearly 25% jump from its latest local low. However, this fresh burst of momentum appears to be short-lived, with on-chain data suggesting a tilt towards the bearish side of the market for the altcoin.

According to a Quicktake post by Arab Chain on the CryptoQuant platform, there's increasing evidence that belief is exiting the XRP derivatives market. This observation is based on changes in the funding rates on Binance, which have been in a notable decline over the past few days. The XRP funding rate recently dropped to around -0.028, marking its lowest level since April 2025.

For context, a low funding rate metric implies that long traders (investors with buy positions) are paying a fee to short traders (investors with sell positions) in the derivatives market. This shift, as per Arab Chain, signals a clear move toward defensive positioning and hedging against further downside. The analyst revealed that a deeply negative funding rate indicates a high level of pessimism in the market, as traders are more willing to pay a premium to hold short positions. This trend is particularly damaging given the decline seen by the XRP price in the past few weeks.

Historically, funding rates reaching extreme negative levels often coincide with advanced stages of downtrends, when a large portion of traders are already positioned short. While these low funding rates have sometimes set the stage for temporary rebounds triggered by a return of speculative demand, they primarily reflect heightened caution and reduced risk appetite in the market. Nevertheless, this funding rate level also suggests that any uptick in sentiment could catalyse "faster-than-expected" price moves. As of this writing, the price of XRP stands at around $1.44, reflecting an over 1% decline in the past 24 hours.