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XRP traders faced a massive liquidation on the four-hour chart, which created an imbalance of 5,999%. According to data from CoinGlass, a total of $701,690 worth of XRP was wiped out within a four-hour time span.
5,999% XRP liquidation imbalance
The CoinGlass data showed that XRP shorts traders accounted for the greatest share of liquidations.
On the four-hour chart, short traders saw liquidations reaching $690,370. This is against only $11,320 worth of liquidations from longs, creating a 5,999% imbalance.
While the liquidation imbalance is not huge in absolute terms, the imbalance between short and long traders is extreme — far beyond typical 50/50 splits. It suggests overcrowded bearish bets getting crushed.
The XRP price spiked slightly upward to $2.45, catching short sellers off guard. As shorts were liquidated, their forced buys added massive buying pressure, creating a feedback loop.
A $701,690 liquidation in a short window is high for XRP and, therefore, indicates a volatility spike. Also, the 5,999% imbalance screams "short squeeze."
XRP price lag, What's next?
However, the forced short covering is yet to reflect in higher prices for XRP. In previous cycles, liquidation imbalances usually preceded 20-50% pumps for XRP. This is because it clears out weak hands, potentially stabilizing for further upside.
While great for longs, it highlights leverage dangers; over 80% of retail traders lose money on derivatives. XRP investors are, thus, advised to avoid high leverage during volatile periods.
As of press time, XRP is priced at $2.44, down 0.55% over the past 24 hours. Investor activity also remained low, as indicated by the trading volume. The metric has plunged more than 23% to $4.07 billion within the same period.
Meanwhile, the upcoming spot XRP ETF launch could signal rallies for the XRP price as long as adoption is high. This institutional-investor-focused fund is considered a major trigger for the potential XRP price rebound.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team