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XRP, the seventh largest cryptocurrency by market capitalization, has seen an increase in trading volumes, skyrocketing by 58% in the last 24 hours. This spike coincides with a broader sell-off in the cryptocurrency market, which saw a staggering $377 million in liquidations.
Cryptocurrencies fell broadly on Friday, following a report that the U.S. was investigating stablecoin issuer Tether for violations of sanctions and anti-money laundering regulations.
Paolo Ardoino, Tether CEO and CTO at Bitfinex, took to X shortly after the piece, saying the WSJ is "regurgitating old noise." According to Ardoino, there is no indication that Tether is being investigated.
Meanwhile, in the last 24 hours, XRP's trading volume has risen 58.62% to over $1.36 billion, or 2.66 billion XRP, according to CoinMarketCap data. This increase in volume might be an indicator of market activity, as traders either seek to capitalize on price movements or adjust their positions in response to the market sell-off.
At the time of writing, XRP was down 2.29% since the past day to trade at $0.516 and down 7% weekly.
Crypto market faces $377 million liquidations
According to CoinGlass data, crypto-tracked futures saw over $377 million in liquidations in the past 24 hours as the market dipped, representing a 182% increase.
Traders betting on higher prices lost more than $308.76 million; those betting on Bitcoin (BTC) and Ethereum (ETH) lost $44.21 million and $45.64 million, respectively. The largest single liquidation order was on Binance — a BTCUSDT trade valued at $3.59 million.
A liquidation occurs when an exchange terminates a trader's leveraged position because the trader is unable to meet the margin requirements. A silver lining to this is that a cascade of liquidations may foreshadow a price reversal due to an overreaction in market sentiment.
In a recent tweet, Santiment shared this viewpoint stating that "assuming markets keep their underwhelming trajectories going into the weekend, expect for sentiment to begin reflecting some much-needed FUD, which would in turn imply a market bounce to start next week."