XRP‘s leveraged market went through a series of brutal flushes this week. In just five days, derivative traders who bet on the token’s upside have lost more than $30 million, according to CoinGlass. What happened is a sudden price reversal after a moment of optimism on November 4 that caught buyers off guard and set off a cascade of liquidations all across the crypto board.
Liquidations hit extreme levels by Friday, running 2.74 times above the weekly average. Exchanges' data shows a completely lopsided picture where longs account for 95.54% of all daily losses worth $16.01 million out of a total $16.75 million. Shorts got off with a scare, losing a token $746,000. Of course, Binance as the most liquid platform was the place of the most pain, with $8.06 million in leveraged positions on XRP wiped out on the exchange.
What played out is a textbook long squeeze. Traders opened overleveraged positions hoping the rally would continue, got trapped in a falling trend, and their forced closures started knocking each other out down the chain. More than 3,600 traders worldwide lost their deposits completely.
Wheres the bottom？
XRP dropped 6.41% over the past days on the spot market, leaving the price pinned at $1.1799 by the weekend. How strong sellers are is evident by the XRP/USD chart on TradingView. Here the weekly candle comes to closure with a long upper wick, meaning every bullish attempt to take control and buy the dip above $1.22 was shut down.
For XRP buyers, the technical picture looks worrying:
- The price has settled below key moving averages, the 50 EMA and 100 EMA. The latter has now turned into hard resistance at $1.271.
- The Relative Strength Indicator is at 33.21 with the 'bearish' divergence appearing earlier on the chart fully playing out, and the trend is clearly pointing down.
The next dangerous trigger for the market is at $1.1588 as thats where the nearest “long pain” zone lies, according to Coinglass. The price is just 1.79% away from that line.
Liquidation Max Pain chart for XRP with a critical long pain level at $1.1729, Source: CoinGlass
Algorithms put the odds of the chart testing this level within the next 24 hours at roughly 50%. If bulls give up this line too, a liquidation cascade will force-close another 928,900 in positions and speed up the decline. Buyers right now have no support above current XRP price, while sell pressure below is estimated at under half a million of dollars.