XRP Defies 851% Liquidation Imbalance With $2 Million Short Squeeze

A local attempt to short XRP on the one-hour timeframe triggered a wave of forced short-position closures. The asset not only held key support but also turned aggressive selling into fuel for a $2 million short squeeze, successfully neutralizing a critical imbalance in the derivatives market.

According to CoinGlass, cumulative liquidations across the crypto market exceeded $386.09 million over the past 24 hours, affecting 78,000 traders. The largest order, worth $11.76 million, was recorded in the ETH/USDT pair on Binance. However, the most abnormal dynamic developed within a single hour in XRP derivatives.

Heatmap of 1-hour cryptocurrency liquidations showcasing Ethereum, Bitcoin, and XRP, Source: CoinGlass

The volume of short-position liquidations during this narrow time window reached $2.02 million, while just $1.58 million in long positions was closed.

The forced-covering cascade among sellers created an hourly liquidation imbalance of 851%. Trapped by margin requirements, bears were forced to close their positions at market prices, which acted as a catalyst for the price increase.

On the TradingView chart, the price reaction was immediate:

• Around $1.38–$1.39, sellers ran into a dense wall of limit buy orders.
• The buying impulse triggered short sellers' stops and pushed the price to a local peak at $1.44.
• The Relative Strength Index (RSI) surged into overbought territory.

The attempt to push XRP into a low-liquidity zone failed. Due to the absence of real supply, exchange algorithms executed market buy orders at increasingly higher prices.

Why shorting XRP in September was a bad idea

The derivatives imbalance coincided with a strong news backdrop in mid-September. Bears underestimated external factors: the XRP Ledger network is holding a record 8.57 million unique addresses.