Bitcoin
BTC$42 435.30

-3.82%

Ethereum
ETH$2 898.43

-7.49%

Cardano
ADA$2.23

-0.57%

Tether
USDT$1.001440

0.09%

Binance Coin
BNB$352.49

-7.00%

XRP
XRP$0.932568

-6.42%

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

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%
SEC loses a battle to win the war? Ripple dissociates from pumping XRP
XRP price soars to new highs after recent legal victories
Ripple becomes tidal wave, leads weekend pump and notches legal victories
XRP surpasses $1 for the first time since 2018: What’s behind the new rally?
XRP is up roughly 20% over the past 24 hours and is currently trading for $1.08
XRP Hits Two-Month Price High in Wake of Ether Rally
TradedWell: Invest in the most popular cryptocurrencies of 2021

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap Volume 24h
1 Bitcoin (BTC) BTC Bitcoin predictions 86% 27 $42 435.30 -3.82% -10.67% $798 843 453 346 $41 875 933 869
2 Ethereum (ETH) ETH Ethereum predictions 74.8% 50 $2 898.43 -7.49% -16.63% $341 018 107 532 $25 119 846 328
3 Cardano (ADA) ADA Cardano predictions 64% 78 $2.23 -0.57% -6.34% $71 411 624 055 $5 734 484 720
4 Tether (USDT) USDT Tether predictions 96% 1 $1.001440 0.09% 0.11% $68 691 485 942 $92 416 325 974
5 Binance Coin (BNB) BNB Binance Coin predictions 60.8% 78 $352.49 -7.00% -14.45% $59 266 206 180 $2 064 251 017
6 XRP (XRP) XRP XRP predictions 75.2% 48 $0.932568 -6.42% -12.98% $43 567 385 538 $4 641 985 825
7 Solana (SOL) SOL Solana predictions 63.2% 83 $139.49 -5.82% -1.32% $41 467 489 552 $4 041 527 553
8 USD Coin (USDC) USDC USD Coin predictions 91.6% 1 $1.000761 0.07% 0.05% $30 432 510 822 $3 991 490 878
9 Polkadot (DOT) DOT Polkadot predictions 62.8% 74 $30.77 -2.94% -9.08% $30 391 187 124 $3 785 910 016
10 Dogecoin (DOGE) DOGE Dogecoin predictions 65.2% 78 $0.208918 -6.33% -14.44% $27 455 953 723 $2 219 973 271
11 Avalanche (AVAX) AVAX Avalanche predictions 63.2% 82 $73.45 -4.25% 12.05% $16 179 548 858 $2 391 193 014
12 Terra (LUNA) LUNA Terra predictions 68.8% 61 $34.85 -2.03% -0.58% $13 942 018 660 $2 307 928 114
13 Binance USD (BUSD) BUSD Binance USD predictions 95.6% 1 $1.000668 0.05% 0.05% $13 477 216 401 $6 991 450 944
14 UniSwap (UNI) UNI UniSwap predictions 65.2% 74 $19.64 -8.12% -20.80% $12 010 497 802 $461 226 982
15 Chainlink (LINK) LINK Chainlink predictions 68% 64 $22.80 -7.36% -19.93% $10 361 191 269 $1 641 630 892

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

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

© 2015-2021 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.