Source: Cointelegraph Original: "{title}"
On March 19, Ripple CEO Brad Garlinghouse announced that the company has received approval from the U.S. Securities and Exchange Commission and is no longer suspected of issuing unregistered securities worth $1.3 billion.
After the news broke, XRP (XRP) surged to $2.59, but as the cryptocurrency experienced a 22% pullback, the gains gradually faded, dropping to $2.02 by March 31.
Investors are concerned about a deeper price correction, as XRP's trading price is 39% lower than its all-time high of $3.40 on January 16. Additionally, XRP perpetual futures indicate strong demand for bearish leveraged bets.
Increased demand for bearish bets during XRP's decline
When bulls (buyers) seek more leverage, the funding rate turns positive, while when bears (sellers) dominate, the funding rate turns negative. In a neutral market, it typically fluctuates between 0.1% to 0.3% every seven days to offset exchange rate risks and capital costs. Conversely, a negative funding rate is considered a strong bearish signal.
XRP futures 8-hour funding rate. Source: Laevitas.ch
Currently, the XRP funding rate is -0.14% every eight hours, equivalent to a weekly cost of 0.3%. This indicates that bearish traders are paying for leverage, reflecting weak investor confidence in XRP. However, traders should also assess XRP margin demand to determine whether bearish sentiment extends beyond the futures market.
Unlike derivatives contracts, which always require buyers and sellers, the margin market allows traders to borrow stablecoins to purchase spot XRP. Similarly, bearish traders can borrow XRP to open short positions, anticipating a price decline.
OKX's XRP margin long-to-short ratio. Source: OKX
The long-to-short margin ratio for XRP on OKX is 2x, favoring bulls (buyers), close to the lowest level in nearly six months. Historically, extreme confidence has pushed this metric above 40x, while readings below 5x favor bulls and are generally seen as bearish signals.
President Trump raises XRP's profile, paving the way for future price increases
Despite the cryptocurrency gaining mainstream media attention, both the XRP derivatives and margin markets have signaled bearish momentum. Notably, on March 2, U.S. President Trump mentioned XRP, along with Solana (SOL) and Cardano (ADA), as potential candidates for the country's digital asset strategic reserves.
Google search trends for XRP and BTC. Source: GoogleTrends / Cointelegraph
Between March 2 and 3, XRP's Google search popularity briefly surpassed that of Bitcoin (BTC). A similar surge in search volume occurred again on March 19, coinciding with Ripple CEO Garlinghouse's comments on the anticipated SEC regulatory ruling. As the third-largest cryptocurrency by market capitalization (excluding stablecoins), XRP continues to gain market favor due to its early adoption advantage and high liquidity.
Global traditional financial broker Interactive Brokers announced on March 26 that it is expanding its cryptocurrency services to include trading support for SOL, ADA, XRP, and Dogecoin (DOGE). The platform has been offering trading services for Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) since 2021.
The accelerated acceptance by traditional financial institutions, combined with the continuously rising Google search popularity, further solidifies XRP's market position as a leading competitive coin. This also sets the stage for subsequent capital inflows—when the macroeconomic environment improves, retail investors tend to actively seek competitive coin assets like Ripple that have strong marketing appeal and can serve as alternatives to traditional finance.
Related: Various altcoins plummet on April Fool's Day, while the overall crypto market remains stable.
This article is for informational purposes only and does not constitute any legal or investment advice. The views expressed represent the author's personal stance and may not reflect the official views of Cointelegraph.
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