XRP Faces Critical Test as 1,614% Liquidation Imbalance Wipes Out Bullish Traders

What to Know

• XRP long liquidations reached $18.57 million as prices weakened further.
• Spot XRP ETFs attracted inflows despite broader crypto market.
• Support near $1.20 remains critical for XRP’s next move.

A massive liquidation imbalance has emerged in the XRP derivatives market, with long traders losing $18.57 million compared to just $1.15 million in short liquidations. The imbalance reached 1,614%, highlighting the scale of bullish positions removed from the market as XRP slipped below the key $1.25 level.

Data from CoinGlass shows that the decline triggered a widespread long squeeze across major derivatives exchanges. As leveraged positions unraveled, automated risk systems accelerated selling pressure and pushed XRP lower within hours. The token eventually dropped to $1.2264, extending a broader downtrend that has persisted since XRP peaked near $3.50 several months ago.

The latest decline also deepened June’s losses. XRP has already fallen more than 8% since the start of the month, placing additional pressure on traders who expected support levels to hold during the recent market weakness. Consequently, the liquidation event became one of the largest recent shakeouts for XRP derivatives participants.

While many retail traders exited the market through forced liquidations, a different trend emerged among institutional investors. This divergence has created a notable split between leveraged traders and longer-term capital allocators.

Also Read: Breaking: Mastercard Adds RLUSD and XRP Ledger to Stablecoin Settlement Network

XRP ETFs Continue Attracting Capital Despite Market Weakness

On the same day that derivatives platforms liquidated millions of dollars in long positions, spot XRP exchange-traded funds recorded $4.13 million in net inflows. The continued inflow suggests that some institutional investors viewed the decline as an opportunity to increase exposure rather than reduce risk. Moreover, the inflows arrived during a period when several competing digital asset products experienced substantial withdrawals. Bitcoin ETFs alone recorded more than $519 million in net outflows, making XRP’s positive flow data stand out even more.

The contrast between ETF demand and derivatives liquidations has become one of the market’s most closely watched developments. Although short-term traders faced significant losses, larger investors appeared willing to maintain confidence in XRP’s longer-term outlook. Additionally, total assets held across XRP investment funds remained above $1.4 billion despite recent volatility. This indicates that institutional participation has remained relatively stable even as broader market sentiment weakened.

Key Support Zone Now Comes Into Focus

Market participants are now monitoring the support area between $1.20 and $1.22. This range emerged as an important battleground during the latest selloff and could determine XRP’s next directional move. A sustained recovery in ETF inflows may help stabilize prices and support consolidation above current levels. Under that scenario, XRP could gradually work toward a recovery target near $1.38 as selling pressure eases.

However, continued weakness across the broader cryptocurrency market would increase the likelihood of another downside test. Some technical indicators suggest that further declines could expose XRP to lower support zones, including the lower Bollinger Band region near $0.95. The 1,614% liquidation imbalance has highlighted a growing divide between leveraged traders and institutional investors in the XRP market. While millions of dollars in long positions were erased during the recent selloff, steady ETF inflows indicate that larger investors continue accumulating exposure. Whether support around $1.20 holds could play a major role in determining XRP’s next move.

Also Read: XRP Futures Market Shows Major Splits Between Binance and Bybit – Here’s the Significance

The post XRP Faces Critical Test as 1,614% Liquidation Imbalance Wipes Out Bullish Traders appeared first on 36Crypto.