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XRP Price Crash Chaos Causes 45% Discount on Major Exchange

Fri, 08/18/2023 - 08:56
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Gamza Khanzadaev
Arbitrage traders have incredibly lucrative opportunity amid chaos of XRP price collapse
XRP Price Crash Chaos Causes 45% Discount on Major Exchange
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In a dramatic turn of events, the crypto market witnessed a whirlwind of liquidations, resulting in over $1 billion in losses within a mere 24 hours. The fallout, affecting nearly 200,000 traders, sent shockwaves through the trading community. As market volatility soared, traders were left grappling with stop orders and margin calls, while a silver lining emerged for opportunistic investors seeking to exploit the downturn.

Bitcoin Price Plunges, But There's Silver Lining

A surprising arbitrage opportunity materialized on renowned exchange Bybit, unveiling an astonishing 45% discount on the price of XRP. Distinct anomalies were observed in the derivative contracts XRPUSD and XRPUSDT, where a significant depeg occurred. Notably, the dollar-collateralized futures contract displayed a jaw-dropping value of $0.32 for XRP, while its USDT counterpart settled at $0.46. This price divergence was transient, lasting a mere 20 minutes.

A prominent figure within the crypto sphere, known by the nickname "DeFi^2," offered insights into this aberration, attributing the phenomenon to the potential depletion of spot XRP among algorithmic market makers. These market forces, strained by the cascade of widespread liquidations, may have inadvertently triggered the pricing dislocation.

Did Bitcoin Price Crash to $25K Because of Fake SpaceX News?

Analysts point to a pivotal Wall Street Journal report, revealing SpaceX's offloading of BTC holdings, as the prime instigator behind the market nosedive. The downturn, however, was short-lived as an upswing materialized moments after the news broke of the preliminary approval for Ethereum Futures ETFs.

As for now, the peg on Bybit was restored, and XRP is currently trading at $0.505 per token.

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About the author

Financial analyst, trader and crypto enthusiast.

Gamza graduated with a degree in finance and credit with a specialization in securities and financial derivatives. He then also completed a master's program in banking and asset management.

He wants to have a hand in covering economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.