XRP Shorts Suffer $33M Liquidation in 12 Hours amid Crypto Whales Buying Spree
TL;DR: In the last 12 hours, over $33 million worth of XRP shorts were liquidated, following a court ruling that favored Ripple Labs and rejected the classification of XRP as a security. This massive liquidation, triggered by the sudden price upswing, indicates the substantial risk attached to leveraged crypto trading. Concurrently, XRP whale activity spiked, potentially indicating sustained bullish momentum.
In a landmark ruling favoring Ripple Labs, the court declared that the associated XRP token should not be deemed a security. This decision sent shockwaves through the crypto market, particularly among short traders.
In the 24 hours following the verdict, around 80,950 traders faced liquidation, culminating in a total liquidation value of $285.50 million. Interestingly, CoinGlass data reveals that 75% of these liquidations were short positions.
Significant liquidations were observed across multiple cryptocurrencies within a brief 12-hour window, including Bitcoin worth $50.11 million and Ethereum amounting to $38.11 million.
In the case of XRP, the largest single liquidation order transpired on Bitmex, involving tokens valued at $2.82 million. Strikingly, XRP's total liquidation value for the past 12 hours reached $58.23 million, with $32.96 million accounting for short positions being liquidated.
These events underscore the inherent risk of short liquidation, or a short squeeze, in leveraged cryptocurrency trading. This phenomenon occurs when investors or traders fail to meet their margin requirements due to a sudden asset price surge.
Meanwhile, on-chain data provider Santiment reported a significant increase in XRP whale activity following the court ruling. Whale transactions, defined as large-scale transfers made by major cryptocurrency holders, have achieved their highest levels for 2023.
Over the last 24 hours, the XRP network recorded 637 whale transactions, each valued at over $100,000. Santiment underscored the significance of understanding the context of these transactions. A surge in whale and shark activity, referring to substantial cryptocurrency holders, during a price upswing, often signifies that the upward momentum may persist.
This wave of liquidation and the subsequent increase in whale activity point to an interesting, if not volatile, time for XRP and the wider crypto market. The court ruling favoring Ripple Labs removes some degree of regulatory uncertainty surrounding XRP, potentially paving the way for broader institutional adoption. However, the substantial losses incurred by short traders underscore the inherent risk in cryptocurrency leveraged trading.
While the increased whale activity could signal robust market confidence and a potential continuation of the upward price trajectory, it's crucial to remember that cryptocurrency markets remain unpredictable. Investors and traders must always be prepared for sudden market shifts.
