XRP Sellers Face Liquidation Risk Up to $158M at Just a 3% Price Rise

XRP sees cumulative short liquidation leverage of more than $158 million all the way to $1.55, just a 3% increase from current prices.

After rising to a local top above $1.65 on Sept. 23, XRP faced a pullback along with the rest of the crypto market. A rebound followed immediately, pushing prices above $1.60 before XRP retreated again to $1.50 at press time.

XRP Sellers Face $158M Liquidation Leverage at $1.55

Amid the latest price retreat, market data shows that most investors have turned to opening shorts in anticipation of further declines. XRP had dropped to $1.46 earlier today before rebounding to $1.50, yet market participants believe steeper declines may be on the horizon.

According to derivatives data provided by Coinglass, a leading market analytics platform, XRP sellers have ramped up cumulative short liquidation leverage of up to $158.82 million from the current price of $1.50 to the $1.553 high on the 7-day timeline.

This indicates that if the XRP price recovers just 3% from the current $1.50 level to $1.553, traders with XRP short positions could witness cumulative liquidation of nearly $159 million at different price levels up until the $1.553 area.

Further data shows that, exactly at the $1.553 mark, traders on Binance, the world’s largest crypto exchange by trade volume, could face liquidations to the tune of $6.03 million, while liquidations impacting OKX traders may reach $2.37 million. Meanwhile, Bybit leads with about $8.04 million in liquidation leverage at $1.553.

Short Liquidation Leverage Exceeds Longs by $200M

This confirms the high concentration of short positions stacked above the current XRP price. More importantly, Coinglass reveals that from the current price to $1.639, the XRP derivatives market features cumulative short liquidation leverage up to $392.83 million. For context, this is just a price difference of 8.6%.

Meanwhile, at the other end of the spectrum, from the current price to $1.373, an 8.46% drop, the cumulative long liquidation leverage sits at $193 million. This means the cumulative short liquidation exposure surpasses long liquidation exposure by a whopping $200 million at the same price spread. 

Such situations can put pressure on bulls, especially if buying pressure starts to disappear from the market. However, if buyers return and the price recovers rapidly, it would create the perfect condition for a potential short squeeze, where the concentration of shorts could be forced to buy XRP to maintain their positions or face massive liquidations.