After the brief crypto market rebound witnessed in the past day, momentum appears to be fading as prices of leading cryptocurrencies stay stagnant. Amid this slow price movement, XRP has seen its derivatives market strike an extreme imbalance in its liquidation trend over the last hour, according to data provided by CoinGlass.
Coming at a time when XRP has continued to face notable price volatility as it remains significantly below the major $3 mark, the unusual liquidation trend has sparked curiosity among market participants as XRP’s next price reaction becomes a major concern.
XRP stuns with $0 activity
According to data provided by the source, XRP has recorded about $56,076 in long positions being liquidated in just one hour, while no liquidation activity was recorded for traders who are supposed to bet on the asset’s downtrend during the period.
With the XRP hourly liquidation trend projecting an imbalance ratio that is quite impossible to calculate, market watchers are closely monitoring its on-chain activities. Although not recorded, the asset has a possibility of having at least $1 in short liquidation, positioning it for a massive liquidation imbalance of 56,076% in mere minutes.
Usually, when short traders face little to no liquidations, it signals that their bearish bets have paid off as the asset’s price drops. However, the situation is different in this case. Although XRP's price chart has shown a decent price swing that looks stable during the period, no short liquidations were recorded. This is not because shorts profited, but because none were placed at all.
While massive liquidation imbalances that wipe off bull traders like this often suggest a successful bear trade, the $0 twist this time hints at a complete lack of short positions, suggesting that bearish traders have shown no interest in the last hour.
With investors questioning its possible rebound move, they fear that the extreme absence of interest from short traders may be far beyond optimism. Oftentimes, situations like this are perceived to be pointing to market overconfidence that often sets the stage for increased volatility.
While this is not the first time the market is recording a single-sided liquidation trend for major cryptocurrencies, including Bitcoin, actions like this have historically preceded both sharp rallies and sudden price corrections, putting investors in extreme uncertainty.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team