XRP sees cascading liquidations amid derivatives-market volatility…short-term uncertainty rises

Volatility is rising in the XRP derivatives market as an unusual pattern has emerged in which short and long positions are liquidated in rapid succession over a short period. Despite the recent price rebound, leverage positions have been swiftly repositioned, fueling uncertainty over the near-term direction.

According to a NewsBTC report on the 8th (local time), XRP has rebounded over the past few days and is trading above the $2.20 level. In the derivatives market, however, successive liquidations of short and long positions have formed a separate tension phase from price stability.

CryptoQuant data show that in the XRP futures market, a large-scale liquidation of short positions occurred first, followed by long-position liquidations. This two-way liquidation pattern is interpreted as indicating that market participants failed to respond properly to short-term price moves. As leverage has been unwound quickly, the market appears to have shifted to a more balanced yet more volatile phase.

Binance futures data illustrate the moves in more detail. On Jan. 5, the XRP market saw roughly $4.4 million in short-position liquidations, most of which were recorded on Binance. The resulting forced buying pressure pushed the price up to around $2.40, but the upswing failed to extend.

The following day, Jan. 6, as prices entered a pullback phase, about $4.0 million in long positions were liquidated. Roughly $1.0 million of that occurred on Binance, followed by additional long liquidations totaling about $1.5 million. This is seen as a rapid unwinding of long positions initiated during the rebound.

NewsBTC said of XRP’s recent price action that it was "closer to a rebound driven by short covering and liquidations than by strong spot buying." It added that "given Binance’s large share of XRP derivatives trading, it is difficult to rule out a repeat of similar two-way liquidation phases," and analyzed that "volatility remains elevated as leverage is rebuilt after the rebound ahead of a key resistance zone."