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XRP’s weekly rally of 18% might be under threat as a liquidation storm has hit the largest cryptocurrency exchange, Binance. As per CryptoQuant insights, XRP has experienced a two-sided liquidation trap and punished every investor that was over-leveraged, regardless of direction.
Binance bears and bulls caught in liquidation squeeze
Notably, within 48 hours, the XRP liquidation cascade on Binance triggered over $4.4 million losses for traders betting short on the asset on Jan. 5, 2026.
After their bet, the price climbed rapidly, leaving these investors in the red. Out of the $4.4 million, Binance alone accounted for approximately $3.09 million of the liquidations as the risky short bets were on the exchange.
This short squeeze made traders chase the rally and opened long leveraged positions near $2.40. However, the market witnessed a pullback in price, and this was enough to trigger long liquidations on Jan. 6.
About $4.4 million longs were also wiped out in addition to another $1.5 million spike shortly thereafter, as late buyers were trapped at the top.
On both occasions, the Binance exchange was hit the hardest. The liquidation pattern did not spare any investor, as it first cleared short traders before moving against long positions as well.
This development has sparked concerns about the price outlook for XRP and its volatility pattern.
If market participants sense that this volatility will linger, it might cause a pullback of interest, and XRP’s previous gains will be eliminated.
As of this writing, XRP is changing hands at $2.22, which represents a 6.35% decline in the last 24 hours. The coin plunged from an intraday peak of $2.39 to the current level as investors engaged in profit taking following the volatility flash.
This has also affected trading volume, which plunged by 30.42% to $5.73 billion within the same time frame. With the $2.30 support already breached, there are concerns that XRP could slip further to $2.02 unless the market quickly recovers.
Can XRP avoid decline amid bearish signals?
As U.Today reported, XRP has the likelihood of slipping below $2 again. This is because the altcoin has hit a classic Bollinger Bands rejection zone, which signals that the coin could stray into sub-$2 before any sustainable breakout in price.
Despite these bearish concerns, Ripple executive Reece Merrick believes that institutional interest in XRP is growing due to the asset’s utility.
He believes that in the long term, it will trigger a price gain for the altcoin.
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