XRP Prints Massive 3,254% Liquidation Imbalance Amid ETF Buzz
The recent launch of the first spot XRP ETF has attracted significant attention, but contrary to bullish expectations, XRP's price has seen a sharp correction instead of a surge. According to Coinglass data, the XRP derivatives market experienced $10 million in liquidations within four hours, with $9.09 million wiped out from long positions, leading to a 3,254% liquidation imbalance favoring bearish traders. This downturn has disappointed investors who anticipated a price increase from the ETF hype. Analysts describe the situation as a 'buy-the-rumor, sell-the-news' scenario, where bullish sentiment was met by immediate selling pressure, resulting in notable losses for long traders.
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Investor Attention on XRP Amid ETF Launch
All eyes are currently on XRP as investors are carefully observing its price move amid the growing buzz surrounding the recent launch of the first spot XRP ETF. However, the XRP derivatives market has failed the expectations of bullish traders who predicted a surge right after the ETF launch. Data from Coinglass reveals that a massive $9.09 million in long positions have been wiped out in the last four hours.
XRP's Derivatives Market and Liquidation Imbalance
The data shows that about $10 million were liquidated in the XRP derivatives market within the last four hours, with the majority of liquidations targeting long traders. Out of the total liquidation, a staggering $9.09 million were wiped out in long positions, compared to just $271,060 in shorts.
As a result, XRP has recorded a shocking 3,254% liquidation imbalance favoring bearish traders. This trend has caught the attention of the market, essentially dashing the hopes of bullish traders banking on a price rally with the Canary XRP ETF launch.
Price Correction and Retest of $2.3 Level
Instead of the bullish trajectory predicted prior to the long-anticipated ETF launch, XRP faced a sharp price correction. The correction has led to a retest of the $2.3 level, leaving bullish traders on the losing side of the move. This unforeseen price action contrasts heavily with the initial optimism fueled by the ETF announcement.
XRP's One-sided Liquidation Highlights Aggressive Sentiment
The significant liquidation in favor of short traders highlights the overly aggressive bullish sentiment surrounding the Canary XRP ETF launch. Despite the hype, XRP's price action failed to meet expectations, resulting in notable losses for bullish traders. The one-sided liquidation reveals the high risk involved in expectations tied to such major events.
Market Reaction: 'Buy-the-rumor, Sell-the-news' Phenomenon
Speculators have described the XRP futures activity as a classic “buy-the-rumor, sell-the-news” event. Traders had positioned heavily for a potential upside breakout, only to be caught off guard by immediate selling pressure following the ETF debut.
This type of liquidation event was not entirely surprising, as market experts had previously predicted such a scenario, emphasizing the volatility often observed around major announcements.