Bitcoin
BTC$19 140.20

0.69%

Ethereum
ETH$1 052.12

-0.25%

Tether
USDT$0.999073

0%

USD Coin
USDC$1.000180

0.03%

Binance Coin
BNB$216.97

-0.05%

Binance USD
BUSD$1.000661

0.08%

420M$ in leveraged long traders liquidated after XRP rallies to $1.96


15 Apr 2021

#XRP

XRP price dropped by 20% shortly after making a 2021 high at $1.96, but have the altcoin’s bullish fundamentals changed? XRP holders couldn't have asked for a better year as the cryptocurrency rallied almost 800% and flirted with a $2 level in the early hours of April 14. 

In addition to achieving its highest level since January 2018, this robust price increase signals that investors are not worried about the ongoing SEC "unregistered securities offering" dispute.

However, just 6 hours after rallying to $1.96, XRP price crashed by more than 20%. During an interview, DCG Group CEO Barry Silbert said it would be risky for exchanges and companies in the United States to relist XRP ahead of receiving the SEC's blessing. These remarks may have contributed to the unprecedented $420 million long liquidations on derivatives exchanges today.

Over the past couple of weeks, the primary catalysts for XRP's rally have been victories in Ripple's legal battles. Lawyers representing Ripple were granted access to internal SEC discussions regarding cryptocurrencies, and more recently, a court denied the disclosure of two Ripple executives' financial records, including CEO Brad Garlinghouse.

Considering the recent rally, pinpointing a single reason for the price correction will likely be inaccurate. Nevertheless, the impressive $420 million long liquidations past 24-hours exceed those of Feb. 1 when XRP price crashed by 46% in two hours.

The only logical reason behind this staggering liquidation is excessive leverage used by buyers. To confirm such a thesis, one must analyze the perpetual contracts funding rate. To balance their risks, exchanges will charge either longs or shorts depending on how much leverage each side is demanding. Although this is excessive, buyers will withstand these fees during strong price rallies. For example, the current upward price move lasted for almost three weeks, and prior to that another took place in early February.

Blaming the liquidations exclusively on leverage seems a bit extreme, although it certainly played its part in amplifying today's correction.

Moreover, the record growth in XRP futures open interest was accompanied by a hike in the volume at spot exchanges. As a result, the eventual impact from more significant liquidations should have been absorbed by the increased liquidity. Cascading liquidations will always take place in volatile markets. Thus investors should focus on how long it takes until the price recovers from it. Fundamentally, a 10% or 20% intraday drop should not be interpreted differently. The correction depends on how many bids were previously stacked at exchange orderbooks and is not directly related to investors' bullish or bearish sentiment.


Related

RoboForex adds 7 new cryptocurrencies
RoboForex adds 7 new cryptocurrencies
XRP mega whales scoop up over $700M in second-biggest accumulation spree in history
XRP mega whales scoop up over $700M in second-biggest accumulation spree in history
XRP gains 30% after Ripple gets permission to explain fair notice defense vs. SEC
XRP gains 30% after Ripple gets permission to explain fair notice defense vs. SEC
Ripple chair's pay-off plan to convince BTC miners to adopt Proof of Stake
Ripple chair's pay-off plan to convince BTC miners to adopt Proof of Stake
XRP price will fall to new lows vs. Bitcoin if this famous chart pattern plays out
XRP price will fall to new lows vs. Bitcoin if this famous chart pattern plays out
XRP below $1, futures open interest down by 75%
XRP below $1, futures open interest down by 75%
SEC loses a battle to win the war? Ripple dissociates from pumping XRP
SEC loses a battle to win the war? Ripple dissociates from pumping XRP
XRP price soars to new highs after recent legal victories
XRP price soars to new highs after recent legal victories
Ripple becomes tidal wave, leads weekend pump and notches legal victories
Ripple becomes tidal wave, leads weekend pump and notches legal victories

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 60.8% 88 $19 140.20 0.69% -10.68% $365 286 501 881 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 55.6% 93 $1 052.12 -0.25% -14.42% $127 732 400 345 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 96% 1 $0.999073 0% -0.04% $66 020 314 113 USDT 7 days price change
4 USD Coin (USDC) USDC USD Coin predictions 92% 1 $1.000180 0.03% 0.02% $55 812 644 858 USDC 7 days price change
5 Binance Coin (BNB) BNB Binance Coin predictions 61.2% 75 $216.97 -0.05% -9.70% $35 426 838 093 BNB 7 days price change
6 Binance USD (BUSD) BUSD Binance USD predictions 95.2% 1 $1.000661 0.08% 0.04% $17 558 830 487 BUSD 7 days price change
7 XRP (XRP) XRP XRP predictions 64% 69 $0.316937 1.69% -12.93% $15 321 697 757 XRP 7 days price change
8 Cardano (ADA) ADA Cardano predictions 65.6% 71 $0.448043 0.04% -11.32% $15 122 596 829 ADA 7 days price change
9 Solana (SOL) SOL Solana predictions 66% 69 $32.98 0.94% -19.51% $11 325 363 890 SOL 7 days price change
10 Dogecoin (DOGE) DOGE Dogecoin predictions 70.4% 62 $0.066106 1.00% -14.30% $8 770 292 754 DOGE 7 days price change
11 Dai (DAI) DAI Dai predictions 92% 1 $1.000314 0.02% 0% $6 923 688 572 DAI 7 days price change
12 Polkadot (DOT) DOT Polkadot predictions 69.6% 67 $6.72 0.35% -17.69% $6 633 125 820 DOT 7 days price change
13 TRON (TRX) TRX TRON predictions 62.4% 74 $0.065691 3.85% -4.12% $6 075 697 886 TRX 7 days price change
14 UNUS SED LEO (LEO) LEO UNUS SED LEO predictions 70% 54 $5.88 2.75% 0.12% $5 608 593 130 LEO 7 days price change
15 SHIBA INU (SHIB) SHIB SHIBA INU predictions 68% 63 $0.000010 1.24% -13.41% $5 530 696 233 SHIB 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2022 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.