A short squeeze forced XRP bears to close positions at a loss, with short liquidations outpacing longs by 851% within a single hour. The squeeze landed against a backdrop of record network activity and cumulative ETF inflows, just ahead of a Senate vote and a Fed rate decision.
A one-hour attempt to short XRP backfired, triggering a wave of forced short-position closures. The token not only held key support but turned aggressive selling into fuel for a $2 million short squeeze, neutralizing a critical imbalance in the derivatives market.
Liquidations spike across the market
According to CoinGlass data, cumulative liquidations across crypto exceeded $386.09 million over the past 24 hours, affecting 78,000 traders. The largest single order — worth $11.76 million — hit the ETH/USDT pair on Binance. However, the most abnormal dynamic developed within a single hour in XRP derivatives.
During that narrow window, short-position liquidations reached $2.02 million against just $1.58 million in long liquidations, producing an hourly imbalance of 851%. Margin requirements trapped bears, forcing them to close positions at market prices — a move that fueled the price increase.
Price reaction plays out fast
On the TradingView chart, the reaction was immediate. Around $1.38 to $1.39, sellers ran into a dense wall of limit buy orders, and the buying impulse triggered short sellers' stops, pushing the price to a local peak at $1.44 while the Relative Strength Index surged into overbought territory. Because real supply was absent in that zone, exchange algorithms executed market buy orders at increasingly higher prices.
Bears underestimated network and ETF backdrop
The derivatives imbalance coincided with a strong news backdrop in mid-September. The XRP Ledger network is holding a record 8.57 million unique addresses, while cumulative net inflows into U.S. spot XRP ETFs stood at $1.71 billion, with total net assets under management by the funds at $1.588 billion, according to SoSoValue data.
Ahead of the Senate vote on the CLARITY Act and the Federal Reserve's interest-rate meeting this week, any aggressive bearish bet against steady institutional accumulation carried elevated risk from the outset.
Source: U.Today
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