Will XRP Go Up? Binance Just Flashed the Same Signal That Sent XRP From $1.60 to $3.65

XRP is trading at $1.42, up 1.21% in the last 24 hours, but the more significant move may be happening in the derivatives market.

Darkfost, a CryptoQuant author and analyst, flagged a signal on X that the derivatives market may be setting up a trap for short sellers.

Green Flag: Shorts Are Piling In

XRP’s funding rates on Binance have entered what Darkfost calls “a phase of extreme negativity,” while the price ranged between $1.35 and $1.50. Despite a roughly 60% correction, the majority of traders in the derivatives market have been positioning short.

In plain terms: the bearish trade is now crowded.

Darkfost’s view is: “When market consensus becomes excessively aligned in one direction, history shows that markets tend to surprise the majority.”

The Last Time This Happened, XRP Rallied

In April 2025, XRP’s funding rate on Binance hit the same extreme negative zone. The asset was sitting around $1.60 with sentiment in the gutter. What followed was a move to $3.65 by mid-July as crowded shorts were squeezed out.

Darkfost notes that CryptoQuant’s historical data shows periods of extreme negative funding rates have “often been followed by short-term rebounds or corrective rallies in XRP.”

This Isn’t a Guaranteed Reversal

Darkfost is careful here, and so should readers be. He adds that this setup “does not guarantee a lasting trend reversal”. It is a signal worth watching, but not a complete green light.

The broader market is still fragile. Escalating tensions between the US, Israel, and Iran – including reports of coordinated strikes and drone activity – have pushed investors toward safer assets, dragging risk markets including crypto and silver lower.

While altcoins ex-Ethereum (Total 3) have added roughly $75 billion in market cap since the start of February, the environment remains uncertain.

What Would Lead to a Rally?

The CLARITY Act, which has been rising sharply in search interest this week, remains the most significant near-term catalyst. If passed, it would remove the last major regulatory barrier for institutional funds to hold XRP directly.

A regulatory catalyst landing on top of an oversold derivatives setup is exactly how the April 2025 rally ignited, with the SEC settling with Ripple in May 2025. The CLARITY Act could play that role this time.

Whether a catalyst arrives to trigger that setup remains the key question for XRP in March 2026.

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