XRP Open Interest Rises as Funding Turns Red, Signals More Bearish Leverage—and Possible Squeeze
CryptoQuant analyst Maartunn data show XRP open interest rose to about $943M over the weekend, then climbed further to roughly $952M after a rebound. At the same time, XRP funding rates stayed negative (red), a derivatives signal that shorts are effectively paying longs—suggesting fresh bearish leverage rather than a clean long build.
The article warns that when XRP open interest increases during/after a bounce, volatility and liquidation risk typically rise. That raises the odds of a short squeeze if price pushes into nearby resistance, but the prevailing setup still points to downside pressure unless XRP can reclaim key levels.
Traders were told to monitor XRP open interest together with funding rates and price action around support near $1.34–$1.36. If XRP fails to hold above this zone, bearish control likely persists. If buyers force price into the $1.375–$1.38 area, clustered short liquidations could trigger faster upside toward roughly $1.38–$1.405, potentially lowering open interest as shorts close.
Related context: XRP is around $1.35 at writing and week-over-week is flat, while BTC gained over 4% in 24 hours—meaning the broader bounce could be fragile when derivatives positioning stays bearish.
Bearish
XRP open interest rising alongside consistently red (negative) funding rates suggests shorts are adding leverage even as price bounces. That typically supports further downside or at least limits how durable rallies can be. However, the story also notes liquidation clustering near resistance levels, meaning a squeeze is possible if XRP breaks upward into $1.375–$1.38.
In the short term, the market is vulnerable to whipsaws: bearish positioning can cap upside, but a trigger into the liquidation zone could cause a sharp, short-lived rally. In the longer run, without a reset in XRP open interest and a shift to less-negative/positive funding, the derivatives structure remains heavy and increases the probability that rebounds fade rather than trend higher.