Karla Barker 
XRP Derivatives Activity Shows Bearish Shift
Despite XRP posting solid gains earlier this week with daily increases over 5%, the momentum appears to be cooling down. Data from CoinGlass reveals that liquidation activity over the past four hours has shifted in favor of bearish traders, which is somewhat surprising given the general optimism around XRP during this “Uptober” season.
The derivatives market for XRP has been relatively quiet, with only $126,830 worth of positions being liquidated during this period. But what’s interesting is how lopsided this activity has been. Long position holders took the brunt of the damage, losing $117,470, while short traders only accounted for $9,360 of the total liquidations.
Understanding the Liquidation Imbalance
This creates what analysts call a 1,155% liquidation imbalance, which is quite significant. When you see numbers like this, it typically means traders are heavily betting on price increases, even though the immediate market movement might be going against them. I think this shows that despite the recent dip, many traders still believe XRP has room to grow.
The imbalance itself is one of those extreme gaps that doesn’t happen often. While it might seem concerning that bears are winning in the short term, some market watchers suggest this could actually set up short-sellers for potential trouble if XRP reverses course quickly. When too many people are positioned one way, even a small move in the opposite direction can trigger what’s known as a short squeeze.
Current Market Position
XRP is currently trading just above the $3 level, though it has dipped about 1.26% over the past day. This puts the cryptocurrency in a somewhat delicate position. Market participants are watching closely to see whether long positions can rebuild and push the price higher, or if we’ll see more liquidations as the market continues to correct.
What’s notable here is that despite the bearish liquidation activity, the underlying sentiment might still be bullish. Traders continue to place bets expecting higher prices, which suggests they’re looking past temporary dips. This kind of behavior often indicates that market participants see fundamental reasons for optimism, perhaps related to the ongoing discussions about potential XRP ETFs or other developments.
The next few hours could be telling. If XRP can hold above key support levels and long positions start to rebuild, we might see that liquidation imbalance work in favor of bulls. But if the selling pressure continues, those optimistic traders might face additional losses. It’s one of those situations where the market sentiment and actual price action seem to be telling slightly different stories.