XRP Just Posted One of the Nastiest Liquidation Imbalances Seen in This Market Hour, Obliterating Longs

XRP just posted one of the nastiest liquidation imbalances seen on the market this hour, with long positions taking a big hit. By Lucas Outumuro. Updated Apr 14, 2021.

At the hour of 08:00 CET, according to data from CoinGlass, the crypto market saw some significant liquidation activity, with the majority of those being on the long side of the market.

Out of a total of $15.34 million in liquidations, $13.32 million came from longs and $2.02 million from shorts. This puts the long-to-short ratio at 656.44%. Among major tokens, XRP saw one of the nastiest liquidation imbalances seen on the market.

Out of $792,320 in total liquidations, $779,070 came from longs and only $13,250 from shorts. This makes the long-to-short ratio an epic 5,840%, turning it into the most imbalanced liquidation event among major tokens in this time frame.

What is even more surprising is that XRP liquidation volume actually came in higher than of Bitcoin. BTC saw $574,690 in total liquidations during the same hour, with no major deviation in direction. In a space where Bitcoin usually dominates these metrics, XRP leading both in size and imbalance is a clear sign of overexposure on the long side.

So, what happened? Well, it seems like a small price fluctuation in XRP was enough to trigger a cascade of margin calls, as most of the liquidations occurred within a short price range.

At the beginning of the hour, XRP was trading at $2.58, and by the end of it, it reached as high as $2.61. But the majority of the liquidations took place before 07:00 CET, and in that time frame, most of the price action happened within a smaller band.

It is interesting that XRP's price did not change much during that time. It mostly stayed between $2.58 and $2.61, with no big dips. This suggests that these liquidations were not caused by a major sell-off but rather by tight leverage and poor positioning. Even small fluctuations were enough to trigger margin calls.

This kind of liquidation activity usually means there is too much competition in the market. When a lot of traders bet in the same direction with high leverage, it does not take much price movement to quickly unwind positions.

It is not a huge event in terms of money, but the way it is set up and the size of the imbalance are unusual. For now, it just shows that the market is still pretty fragile when it comes to leveraged positions, especially in altcoins like XRP.