If you’ve been watching the market lately, you may have noticed something strange happening behind the scenes.
Both Ethereum (ETH) and XRP just posted the highest funding rates among all Layer-1 blockchains, signaling that traders are aggressively taking long positions. According to Glassnode, ETH funding is now at 0.0083%, and XRP isn’t far behind at 0.0093%.
On paper, that looks like strong bullish momentum. But a closer look at the data tells a more complicated story.
The Bullish Bias Is Clear…
Let’s break this down. A positive funding rate basically means that more people are betting on price going up. So when the rate is this high, it shows a strong long bias in the market. Traders are paying a premium just to stay in their long positions.
And there are reasons for this optimism.
$ETH and $XRP funding rates have turned sharply positive – 0.0083% and 0.0093% respectively – the highest among top L1s.This signals growing demand for long exposure, even as on-chain activity and sentiment remain mixed. pic.twitter.com/uvALLXDXUs
— glassnode (@glassnode) June 30, 2025
For Ethereum, hype around ZK-rollups, Layer 2 scaling, and ETF buzz continues to dominate headlines. Meanwhile, XRP traders are still riding high after Ripple’s big win over the SEC, and the growing speculation around an XRP ETF in 2025 is keeping bulls hopeful.
…But The On-Chain Activity Doesn’t Match
Here’s the thing: while the sentiment is bullish, the on-chain activity is mixed.
Ethereum still struggles with high gas fees, which is slowing down flows. In the latest snapshot, it shows $2.6 billion in 24-hour volume, which is solid but not explosive. Daily active addresses are actually down 11.4%, even as the price tries to move up. So, there’s excitement, but not much follow-through on-chain.
XRP is even more volatile. Its price is at $2.19, but the number of daily active wallets has collapsed by 34.3%. Yes, on-chain volume surged over +637%, which might sound great – but that’s often a sign of short-term whale activity, not organic user growth.
In other words, the price and volume are not moving in sync, and that could be dangerous.
Read also: Wall Street’s New Crypto Darling Isn’t Cardano or Ethereum, But This Altcoin…
Funding Wars: What Comes Next?
The main risk here is simple: over-leveraged longs.
When funding rates stay elevated like this and prices don’t break out, it creates a setup for sharp liquidations. Basically, all those long positions can unwind fast if a surprise selloff happens. Especially since technical indicators for both ETH and XRP still look bearish and hover near oversold zones.
This is where traders need to be careful. If Ethereum doesn’t get a fresh institutional catalyst – like a spot ETF approval, or some real momentum behind ZK rollup adoption – these longs might get caught on the wrong side of a volatility spike.
Same goes for XRP. If the ETF chatter fizzles, and the hype can’t hold the price above key supports, a lot of leveraged longs could be forced to exit in a panic.
Wrapping Up
Yes, funding rates are pumping. But this isn’t a one-way street.
Glassnode’s data shows that while traders are hungry for upside, the underlying activity isn’t quite there yet. ETH and XRP are stuck in a strange zone where sentiment is bullish, but momentum is stuck in neutral.
So what’s the move?
Watch the headlines. Keep an eye on institutional activity. And most of all – don’t get caught overexposed in a funding-driven trap. Because when the market finally decides, it’s going to move fast. And not everyone will be on the right side of that move.
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The post Ethereum and XRP Funding Rates Flash Bullish – But Is It a Trap? appeared first on CaptainAltcoin.
