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This week, the cryptocurrency market began with a massive liquidation event, when over $2 billion in the lowest estimated value of long and short, but mostly the former, experienced a forced close. The echoes of that event are still reverberating, with nearly $300 million liquidated in the last 24 hours, but its character is not so one-sided, according to CoinGlass.
In the midst of this turbulence, an interesting anomaly has emerged in the trading of XRP, currently the third largest cryptocurrency. For example, in the last four hours, liquidations of perpetual futures on XRP totaled $1.44 billion, but only $111,000 were shorts and $1.33 million longs. This is an abnormal imbalance of 1,209% and speaks volumes about the current sentiment around the popular cryptocurrency.
In other words, most traders are bullish on XRP right now, at least in the short term. However, the market is punishing those who have over-leveraged positions or those who opened late, leading to such discrepancies in trading. The late sellers are also there, but in much smaller numbers.
The roots of such an abnormal imbalance in XRP trading lie in the price action of the popular cryptocurrency. Looking at the price chart of XRP, one can understand why there has been a bullish bias toward the token. In the last two days, the price has skyrocketed over 30% and is currently trading at $2.40.
Considering that the XRP price has gained over 400% in the last few weeks and has been in the spotlight of the entire crypto market, many saw an opportunity to jump on the bandwagon. However, as always, latecomers and those who did not manage the risk properly were shaken off, with only a 2.9% decline during today's trading session.