Critical Metric Plunges as Crypto Market Slumps

Crypto

Critical Metric Plunges as Crypto Market Slumps

The cryptocurrency market took a sudden dive in the past couple of hours, with the XRP price making no exceptions.

XRP Price Tumbles but Funding Rates Surprise

XRP tumbled by around 2% in the past hour, bringing its total losses to about 8% for the last day. At the time of this writing, the cryptocurrency is trading at around $2.04.

XRP Price Chart. Source: TradingView

That said, the funding rates on XRP derivatives positions are currently positive What this means in Laymans terms is that traders who have long positions are paying those who have short positions. In other words, the sentiment on the derivatives market is currently positive.

Could this mean that the XRP price is about to rebound？ Not necessarily – positive funding rates only indicate the prevailing sentiment but sentiment is not necessarily tied up to the short-term price action. Short positions could pile up to “farm” the positive funding rates until the market regulates itself into an equilibrium.

Crypto Markets Plunge

Elsewhere, the broader crypto market is also declining.

Source: Quantify Crypto

As seen in the heatmap above, Bitcoins price is trading at around $84,000, down by around 1% on the day, but the losses some altcoins are charting are considerably higher.

For example, Dogecoin (DOGE) is down 8%, Cardano (ADA) is down 6.6%, and so forth.