XRP’s price briefly dropped to a low of $2.15 on Apr. 30, sparking a major bias in liquidations.
According to Coinglass data, $13.9 million in long positions were liquidated in just 24 hours, compared to only $1.49 million in shorts, a nearly 1000% imbalance. This kind of imbalance shows that traders have a strong long bias.
When prices decline, too many long positions can be quickly wiped out, which is what happened in this case, causing a quick cascade that drove prices even lower. Additionally, open interest fell by 4%, indicating that many traders were exiting positions.
XRP has since recovered to a crucial psychological support level of about $2.20. According to some traders, this was a “flush,” removing weak hands ahead of a possible reversal. Others fear that if prices decline again, the long bias may result in additional liquidations and capitulation.
This drop came at a surprising time when many traders are expecting sustained upward momentum. XRP has seen strong progress so far this year. The Securities and Exchange Commission recently paused its appeal against Ripple, paving the way for the company to potentially work with U.S. banks again in the near future.