XRP Funding Rate Dips to Historic Lows as Traders Eye Short Squeeze Potential

• XRP’s funding rate is at levels last seen when the price was $0.33.
• The cryptocurrency is holding above $2 with low open interest.
• Analyst suggests a potential short squeeze could trigger the next move.

XRP’s funding rate has dropped to negative 0.012%, a level last seen when the asset traded near $0.33. Despite this indicator often associated with bearish pressure, XRP currently holds above the key $2.10 support level. 

Popular crypto analyst CryptoinsightUK pointed out this similarity in a tweet, noting that traders appear hesitant, with open interest remaining low. If bullish momentum builds, a short squeeze could drive the next price surge.

What Do Funding Rates, OI, and Volume Indicate?

CryptoinsightUK shared a chart highlighting that XRP’s funding rate sits at historic lows. Funding rates indicate the cost required to hold leveraged positions in perpetual futures contracts. Negative rates typically suggest that short positions (bets on price decline) dominate the market, as shorts must pay longs.

Related: Top Analyst Identifies Technical Pattern to Drive XRP Prices to $4.60

From the chart, XRP OI stands near 591 million coins (worth ap…

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