XRP funding rate spikes 120% in a day; Here’s what it means

XRP is soaring on Wednesday, December 3, with exchange-traded fund (ETF) flows and high-profile industry comments converging to support another rebound. 

Institutional confidence received a notable boost thanks to BlackRock CEO Larry Fink and COO Rob Goldstein’s comments regarding real-world asset (RWA) tokenization, a market already exceeding $23 billion in value, as a transformative force in finance.

Thanks to its fast settlement capabilities and built-in compliance architecture, XRP is positioned as a potential beneficiary of the next wave of financial infrastructure, potentially serving as a liquidity bridge for tokenized assets. At the same time, XRP ETFs have absorbed an estimated $845 million in inflows, and analysts are watching whether they can push past the $1 billion this week. 

As a result, XRP’s funding rate spiked nearly 120% on the daily chart on Wednesday, December 3, showing that leveraged traders have sharply increased their bullish exposure and are more willing to pay a premium to maintain their bets.

Leveraged XRP traders turn more bullish, but there are signs of weakness

While rapid surges in funding rates do reflect growing confidence, they can also point to an overheated market. That is, they can sometimes eat into profits for long-term holders and increase the risk of sudden corrections. 

A persistently high positive rate, especially alongside elevated open interest, usually means longs are overleveraged. Accordingly, if the momentum shifts, the imbalance could trigger a long squeeze.

Indeed, XRP is already showing some signs of fragility. Namely, some recent trading patterns suggest that bulls are on shaky ground in regard to the $2 threshold. In other words, a failure to defend that level could open the door to a sharp slide toward $1.20.

The broader market structure reinforces this bearish narrative. The $2 mark has acted as a vital support throughout the year, but repeated challenges have weakened it. Moreover, the latest retest has produced narrow volatility and shallow recoveries, conditions that often precede decisive breakdowns. 
XRP’s short-term performance is more positive, with the token trading at $2.18 at press time, up 6.65% on the day and about 1% over the past week. Meanwhile, the 14-day Relative Strength Index (RSI) sits at 47.6, signaling balanced momentum.

BlackRock “validates” XRP

Although it did not explicitly reference any particular asset, BlackRock’s aforementioned column has had a noticeable impact on many crypto circles, and XRP traders were no exception. This is hardly surprising, as XRP’s ledger features and established infrastructure make it easy to read the currency itself into the article. 

“If history is any guide, tokenisation today is roughly where the internet was in 1996—when Amazon had sold just $16m-worth of books, and three of the rest of today’s “Magnificent Seven” tech giants hadn’t even been founded,” Fink and Goldstein wrote.

Still, while Fink and Goldstein have undeniably boosted market sentiment, XRP’s adoption trajectory remains dependent on a number of factors, including institutional buys.

“Tokenisation could advance at the pace of the internet—faster than most expect, with enormous growth over the coming decades,” they added.

In short, although excitement and funding rates might be high right now, XRP’s ultimate success will depend on improving fundamentals, not hype.

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