XRP has been on a downtrend for more than a year, and the market is very bearish. After a 72% correction, the funding rates on Binance have reached extreme levels. An analyst states that XRP could fall to $0.87 in the coming days.
XRP funding rates fall to extreme levels on Binance
The XRP funding rate on the biggest exchange, Binance, has reached extremely low levels. Crypto Patel, an analyst, spotted the funding rate reaching low levels and expects the prices to reverse.
After a 72% correction, XRP’s funding rates on Binance have dropped to extremely bearish levels, signaling that an overwhelming number of perpetual futures traders are betting on further downside. Negative funding rates mean short sellers are paying long-position holders, reflecting a market where bearish sentiment has become dominant.
When funding rates reach such extremes, they often indicate that the market is heavily skewed toward one direction, increasing the risk of a reversal if buying pressure emerges.
According to the analyst, short interest continues to build while pessimism has become the prevailing market narrative. Historically, periods in which the majority of traders lean aggressively to one side following a steep correction have often been followed by moves in the opposite direction.
If XRP attracts fresh spot demand or positive catalysts, heavily leveraged short positions could be forced to close, creating a short squeeze that accelerates upward price momentum. While negative funding rates alone do not guarantee a rebound, they suggest the market may be approaching a point where sentiment has become excessively bearish.
XRP’s downfall continues as it tests the 50-day MA
As shown in the chart below, the XRP prices have been crashing for more than a year, and the prices have reached $1.07. The prices crashed from as high as $3.50 to just above $1. As shown in the chart below, the prices tested the 50-day moving average several times, but they were unable to cross above this level because sellers were preventing any upward movement.
XRP could crash to $0.870
Casi Trades, an analyst, stated that there is a high chance XRP could crash below $0.870.
A 5-wave impulse down comes from the Elliott Wave Theory, which suggests that markets move in repeating wave patterns driven by investor psychology. In a downtrend, the price typically declines in five distinct waves, with waves 1, 3, and 5 pushing lower, while waves 2 and 4 are temporary corrective bounces. The fifth wave is often considered the final leg of the bearish move, where selling pressure becomes exhausted as most sellers have already exited their positions.
In this case, the analyst believes XRP is completing its fifth and final impulse wave toward the macro support level at $0.87. If that support holds and the five-wave structure is completed, it could signal the end of the current bearish cycle and the beginning of a larger corrective or bullish reversal. Traders typically look for increasing buying volume, bullish divergence, or a break above key resistance levels after the fifth wave to confirm that buyers are regaining control and a new upward trend is developing.
