XRP Triggers $2.02M Short Liquidation in One Hour Amid Derivatives Volatility

XRP triggered a $2.02 million short position liquidation within one hour, overturning imbalances in the derivatives market according to U.Today.

The cryptocurrency held its key support level before turning aggressive selling pressure into rebound momentum, creating a short squeeze. Overall crypto markets saw cumulative liquidations exceeding $386.09 million over 24 hours, affecting approximately 78,000 traders. The largest single order came from Binance's ETH/USDT pair at $11.76 million.

Within that hour, XRP's short liquidation reached $2.02 million compared to $1.58 million in long liquidations, creating an 851% imbalance. Forced selling triggered by margin requirements pushed prices higher as market orders were executed at current rates.

Price reaction was immediate: on TradingView charts, XRP faced a dense buy wall between $1.38–$1.39 before buyers disrupted short stop-loss orders, pushing the price to a short-term high of $1.44. The Relative Strength Index (RSI) surged into overbought territory.

Attempts to push XRP lower in low-liquidity zones failed as sufficient selling pressure did not materialize, prompting exchanges' algorithms to execute market buy orders at higher price levels. This created a structure where short bets inadvertently spurred additional buying.

The derivatives imbalance coincided with strong news flow from mid-September, including XRP Ledger Network reaching 8.57 million unique addresses—a record high for network activity indicators, suggesting that bearish positions may have underestimated external factors.

Institutional fund flows also added pressure on short bets. According to SoSoValue, XRP spot ETFs recorded cumulative net inflows of $171 million with total assets under management at $158.8 million. Ongoing institutional buying has made aggressive short positions increasingly risky.

XRP's combination of support level defense, improved network metrics, and rising spot ETF fund flows created a short squeeze dynamic. Future market focus will center on whether derivatives liquidations and spot fund inflows continue around macro events.