XRP experienced a sharp decline during the Labor Day holiday, causing a notable wave of liquidations in the futures markets. The price plunging to $1.38 resulted in accelerated compulsory position closures, creating a rare market imbalance. According to CoinGlass data, the hourly liquidation imbalance surged temporarily over 10,535%, with the volume of liquidated long positions exceeding short position losses by more than a hundredfold.
What Drove the Selling Wave?
XRP/USD pair’s retreat from an intraday high of $1.4150 triggered the activation of stop-loss orders among highly leveraged traders. While Bitcoin and Solana saw daily liquidations of $10.72 million and $4.55 million, respectively, XRP faced a shorter-term, technically-driven tremor.
CoinGlass data reveals an hourly liquidation imbalance in XRP exceeding 10,535%, with long positions facing brutal liquidations.
Aggressive long position squeeze was mainly due to accumulated transactions near the critical Liquidation Max Pain zone. CoinGlass serves as a data platform monitoring open positions and potential liquidation levels in derivative markets. Monthly, XRP’s price approached the Short Max Pain level of $1.4368, marked as a maximum pressure point for sellers. Anticipations of surpassing this barrier led to heavily leveraged long positions, which were vulnerable to minor price movements.
Price Recovery and Key Resistance?
The XRP market witnessed a rebound from its local low, trading at $1.3892, with short-term charts indicating potential reversal signals. Technical indicators departed from the oversold territory, suggesting that buyers were re-entering the market at least in the near term.
The price hovered just 3.94% below the pressure point on the short side at $1.4368, where a risk of $9.20 million in short position liquidations exists. Conversely, the Long Max Pain level at $0.9837 stands 28.83% below the current price, aggregating $24.29 million in potential liquidation risk. These data suggest the recent activity was more of a localized shock.
Exchanges Showed Varied Responses
Reactions across exchanges varied noticeably. Net capital outflow was apparent on platforms like KuCoin and Gate, with open position volumes dropping by 5.16% and 4.07%, respectively. Meanwhile, MEXC and Bybit emerged as centers for speculative trading. MEXC’s daily trading volume surged by 118.32%, as investors sought to capitalize on the downturn by viewing it as a buying opportunity.
The nearest hurdle for buyers is highlighted at the $1.4010 level; overcoming this zone could bolster the view that the short-term downward trend has concluded.
The market’s next critical technical threshold will be the resistance at $1.4010. A break above this point could provide more robust confirmation that the short-term declining micro-trend observed in the evening hours has reached its end.
