XRP funding hits extreme lows as bears crowd in: Is a bear trap brewing?

Every time price pushes into a resistance zone, you’ve basically got setup risk for a trap.

Right now, XRP’s structure is showing that in real time. On the daily, it’s bouncing hard off the $1.15 base and grinding up as market sentiment flips back risk-on after the U.S.-Iran peace deal.

But calling this a clean breakout is probably early.

In the early June move, XRP already tried pushing through $1.25 and got rejected, with sellers stepping in and taking control.

That’s usually where things get tricky.

Technically, traders start fading strength into resistance, expecting the same rejection again. It builds overhead supply, and if longs get too aggressive, it can turn into a bull trap.

We already saw a version of that with a 6% pullback after the price tapped $1.25 and got smacked down.

Naturally, the question becomes: Is Ripple [XRP] setting up a similar structure?

One thing standing out is Funding Rates. XRP’s OI-Weighted Funding Rate is basically sitting near rock bottom.

For context, the OI-Weighted Funding Rate tracks whether traders are mostly long or short, but gives more weight to where the big leveraged positions are.

When funding is very positive, it usually means too many traders are long and the market is overheated.

Right now it’s the opposite; funding is deeply negative, meaning most traders are short. Looking at XRP’s last rejection from resistance, this kind of positioning doesn’t look random.

Instead, it actually lines up with a more intentional setup, making the bull trap thesis far from far-fetched.

XRP bears are piling in as retail activity disappears

Ripple is experiencing a pretty rare setup right now.

XRP’s OI-weighted funding rate has dropped into extreme negative territory just as exchange net flows have completely flatlined. In fact, XRP has now gone a full week with net flows sitting near zero, meaning almost no meaningful capital is moving on or off exchanges.

That’s unusual. It suggests retail participation has largely dried up, while bearish positioning continues to build in the derivatives market.

When spot activity goes quiet but shorts keep stacking up, it often points to a market that’s becoming heavily tilted to one side.

Adding to the mix is the recent T. Rowe Price Active Crypto ETF move. 

While retail activity remains largely absent, institutional players continue finding ways to gain crypto exposure. That disconnect between growing institutional interest and increasingly bearish positioning is what makes XRP’s current setup so interesting. 

From a technical perspective, this lines up with XRP’s move back toward the $1.25 resistance zone.

But this time, the setup looks a little different. With funding deeply negative and shorts heavily positioned, the odds are starting to tilt back in the bulls’ favor.

If XRP can push through resistance, it could catch a lot of bears offside and trigger a classic bear trap.

Final Summary

• XRP funding rates are deeply negative, showing most traders are betting on lower prices.
• If XRP breaks above resistance, those short positions could get squeezed and drive a sharp move higher.