A sudden price drop accross the market catches traders betting on an increase off guard.
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XRP saw a 1522% liquidation imbalance after a sudden market selloff forced traders betting on a price increase to close out leveraged positions.
At the time of writing, XRP was down 8.18% in the last 24 hours after a sharp surge to $1.65 on September 23 quickly reversed, catching bulls off guard. The drop continued early Thursday, with the price reaching a low of $1.45 amid an ongoing selloff in the broader crypto market, which liquidated $610 million in positions over the past day.
XRP’s price drop caught traders betting on an increase off guard. Over the last 24 hours, XRP saw a total of $31.48 million in liquidations, with longs accounting for the majority of this figure at $29.54 million while shorts came in at $1.94 million. The percentage imbalance between longs and shorts yields 1522%.
XRP began to rise from a low of $1.24 on September 16, marking 6 out of 8 days in the green afterward. The rise also coincided with XRP’s first golden cross on the daily chart this year. Bulls pushed XRP to $1.65 on Wednesday but could not sustain it above that level, with the price retreating.
After a stunning rally from the past week, the crypto market saw profit-taking, with most digital assets recording significant losses.
The crypto market drop coincided with Treasury yields trading at multi-decade highs as investor bets on another rate hike from the Federal Reserve mounted.
Recent economic data drove expectations of more rate hikes, with traders pricing in a more-than-75% chance that the Federal Open Market Committee will increase rates again at its October meeting.
Speaking in London on Thursday, New York Federal Reserve President John Williams said it would be “reasonable” to expect another Fed interest rate hike by the end of the year.
According to onchain analytics platform Santiment, XRP is flashing a deep long-term MVRV discount, with its 365-day MVRV at around -11.75%.
Lower MVRV usually means less downside risk. When most holders are already underwater, there are fewer profitable traders waiting to sell.
Buying during that pain has historically offered better long-term setups. Despite the recent market rebound, average long-term XRP holders are still deep in the red, signaling more room to recover if demand continues to improve.
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