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As the fourth-biggest cryptocurrency right now, with a market capitalization as large as $183 billion, XRP continues to stun the news headlines with figures that some might attach to a new asset but not such a giant and established one.
This time, at the center of attention is a liquidation imbalance on the XRP derivatives market as, according to fresh data by CoinGlass, the ratio between long and short positions liquidated on the XRP/USDT futures pair came to an abnormal 293,152% figure in just an hour.
Behind these numbers are pure statistics, as in the period under review, the volume of liquidated long positions came to $109,117, while short sellers suffered a loss of only $37.24. The imbalance is evident, but what triggered it needs to be closely studied.
Paying attention to the price chart of XRP shows that in that hour, the big long liquidation happened when there was a minor 0.4% dip, but it was so small that it can only be visible on a one-minute chart. After the dip, the price of XRP rocketed by 1.66% and set a new daily high.
So what was that liquidation imbalance?
The answer seems so ordinary, it is hard to believe — greed. It seems that those who are active with XRP futures got so bullish and overcrowded the buyside so much that even a minor dip caused an epic imbalance, worth as much as six digits in percentage points.
There was no manipulation or tricky market maker’s plan, just too much leverage on one side of the order book — enough to cause a 293,152% distortion on the liquidation heatmap in just an hour.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team