Check Out U.TODAY on Google News * A Precarious Zone for XRP Traders
- Major liquidations on Bybit, Binance, and OKX looming
XRP Prices Dropping 4% May Ignite a Bleed of $60 Million in Bull Market
XRP, the cryptocurrency tied to Ripple Labs, is currently trading at $2.12, as reported by CoinMarketCap figures.
While the token has seen a 11.36% climb over the past month, this bullish momentum might be setting the stage for intense volatility.
Recent insights from Coinglass shows that approximately $60 million in long positions could be erased if XRP drops by just 4%, reaching $2.063.
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In leveraged trading, long positions represent bets that a cryptocurrency's value will keep climbing. If the value moves in the opposite direction too aggressively, the platform automatically liquidates these positions to avoid excessive losses, a process known as forced liquidation.
The XRP liquidation map illustrates a high concentration of long positions between $1.90 and $2.10, designating it as a fragile area for traders.
If XRP slips below $2.063, it could spark a chain reaction of liquidations totalling nearly $64.24 million, marking one of the most substantial XRP liquidation events in recent months.
A Fragile Zone for XRP Traders
This implies a 4% dip from XRP's current price. This price region of potential liquidation is a sensitive area as large liquidations at this level could potentially dampen prices, despite it being short-term.As a consequence, traders and analysts typically keep a close eye on these levels. In crypto circles, this type of event is called "stop hunt" or "liquidity sweep," where the value dips to a level that triggers these liquidations before surging again.
XRP Just Managed to Save Itself $2 Arman ShirinyanShould the Ripple-tied digital asset slip beneath the $2.063 price point, it would result in one of the largest XRP liquidation events in recent times.
Liquidations Galore on Bybit, Binance, and OKX
Meanwhile, the Coinglass data also unveiled the platforms that would be most affected if this liquidation happened. Bybit would be hit the hardest as over $7 million worth of long positions would be liquidated on the platform when XRP's value drops to $2.063.
Binance and OKX follow Bybit with $3.39 million and $1.30 million in planned liquidations from long positions, respectively. As a result, experts recommend that traders holding long positions should start cutting back on their leverage or set up stop-losses to safeguard their positions against the possible drop.
According to an earlier report by U.Today, the bulls are making their way back to the XRP market after a few days of dips.
#XRP
Important Points to Consider
- A 4% drop in XRP value could cause an avalanche of liquidations, mostly affecting leveraged long traders.
- This sequence of liquidations can amplify XRP's price volatility, worsening losses for remaining traders.
- Exchanges like Bybit, Binance, and OKX, hosting large XRP derivatives markets, are prone to witness increased liquidation volumes and trading activity during such a price drop.
- Market sentiment could shift towards hesitant or bearish perspectives if critical support levels break, leading traders and investors to withdraw temporarily.
- After substantial liquidations, open interest may decrease as traders exit the market, potentially reducing leveraged exposure until the price stabilizes.
These insights highlight the vulnerability of XRP's market to price fluctuations, particularly given the elevated leverage and trading volume observed on the leading crypto derivatives platforms.
- The current trading price of XRP is $2.12, according to CoinMarketCap figures, but a 4% dip could potentially lead to one of the largest XRP liquidation events in recent months.
- Coinglass data shows that approximately $60 million in long positions could be erased if XRP drops by 4%, reaching $2.063, with Bybit being the platform that would be hit the hardest.
- In leveraged trading, a potential 4% dip from XRP's current price could spark a chain reaction of liquidations totalling nearly $64.24 million, affecting traders and investors.
- Experts recommend that traders holding long positions should start cutting back on their leverage or set up stop-losses to safeguard their positions against the possible drop.
- The Ripple-tied digital asset slip beneath the $2.063 price point could potentially dampen prices, despite being short-term, and could lead the market sentiment to hesitant or bearish perspectives.
- Recent insights from Coinglass also shows that Binance and OKX follow Bybit with $3.39 million and $1.30 million in planned liquidations from long positions, respectively. This highlights the vulnerability of XRP's market to price fluctuations, particularly given the elevated leverage and trading volume observed on the leading crypto derivatives platforms.
