A 126% price surge that pushed XRP to an all-time high of $3.6 last July started with a pattern that looks a lot like what is happening right now.
Shorts Dominating Despite Rising Prices
Funding rates on Binance have stayed negative since February 2026, even as XRP climbed roughly 27% from a low of $1.10. That gap between trader sentiment and actual price movement is what caught the attention of CryptoQuant analyst Darkfost, who flagged the setup in a recent market commentary.
Short positions have been dominant across a 30-day period, data shows, and that stretch of negativity marks the longest such run in recent history for the token.
The broader altcoin market had a rough start to the year. The TOTAL3 index, which tracks global crypto market capitalization excluding Bitcoin, Ethereum, and stablecoins, shed more than $540 billion during the correction.
Global uncertainty hit altcoins harder than most other asset classes. Since early February, however, roughly $125 billion has flowed back into the index, pointing to a slow but steady return of investor interest.
XRP dropped as low as $1.10 in February before beginning its recovery. Prices have climbed since then, but funding rates have not followed.
According to Darkfost, this kind of divergence carries weight. When the majority of traders are positioned negatively after a drop of more than 60%, history suggests a reversal may be building beneath the surface.
A Pattern That Already Played Out Once
The same set of conditions appeared in April 2025. XRP was trading near $1.25 following a sharp decline, and funding rates had just turned negative for the first time in over 16 months.
They stayed negative well into June 2025. During that time, the price was quietly recovering. By the time funding rates flipped positive again, XRP was already deep into an uptrend. The rally that followed brought the token to $3.6 in July 2025.
That move, from roughly $1.25 to $3.6, represented a gain of 126% and set a new all-time high for the asset.
Capital Returning As Bearish Bets Hold
What makes the current setup similar, based on Darkfost’s analysis, is not just the negative funding rates. It is the combination of those rates holding steady while prices recover and capital slowly returns to the altcoin market. Short sellers have held their positions even as the price contradicts their outlook.
If the 2025 pattern holds any predictive value, the continued buildup of short positions against a recovering price could eventually produce the kind of squeeze that accelerates a breakout.
Featured image from Unsplash, chart from TradingView
