Net Inflows into XRP ETFs May Be a Prelude to Spot Selling

The current chart shows that the funding rate has been negative for a long time. Moreover, it's not just negative; there are negative spikes reaching -0.01 / -0.02. The short side is aggressively maintaining its dominance. Those who opened long positions are gaining funding. In short, the market generally continues to expect a decline. It appears the market is clearly bearish in terms of position.

The price is around $1.32, continuing its downtrend with lower highs and lower lows.

Negative funding is accompanying the decline. However, if the price is also falling while funding is negative, this is not a healthy decline. It means the decline is being driven by the short side rather than the spot market.

There were +2.66M inflows into XRP ETFs during the week of March 23-27. Institutional investors have turned positive, but the price is still under pressure – a contradiction here. Despite smart money buying, the market is maintaining its short position. This means institutional investors are expecting a short-term short squeeze. In short, when the market rises to reduce short positions, the price may face a sharp spot sell-off from institutional investors.

In summary, I can say that volatility will increase in the short term and there is a high probability of a fake breakout. However, if the price starts to rise while funding is negative, we can then say the signal is bullish. Until then, the bearish trend will continue. Rises will be short-lived. $XRP