XRP News Today: XRP plummets 11.6% as speculative overbidding and thin derivatives liquidity trigger margin calls

XRP, the 11th-largest cryptocurrency by market capitalization, faced a sharp sell-off as traders rushed to secure profits following a month-long rally. The asset shed 11.6% in 24 hours, sliding to $3.13 as of July 18, 2024, triggering a wave of margin calls and forced exits. The decline marked a 68% rebound from early July lows, capping off a volatile period that pushed prices to a record high of $3.65 earlier in the week. Analysts attributed the pullback to speculative overbidding and thin liquidity in the derivatives market, where open interest in XRP futures had surged to an all-time high of $10.98 billion [1].

The liquidation event surpassed $18 billion across the crypto market, with XRP accounting for $88.6 million—second only to Ethereum in losses. Over four hours alone, more than $41 million in leveraged long positions were liquidated as prices dipped below critical resistance levels. The sudden rout highlighted vulnerabilities in the XRP derivatives ecosystem, where concentrated leverage around the $3.00–$3.04 range created a "landmine" for traders. A break below $3.04 could trigger cascading liquidations, according to market intelligence platforms [1].

Price action now hinges on the $3.12 level, a key Fibonacci retracement on the 4-hour chart. EGRAG CRYPTO, a prominent market analyst, emphasized that holding this threshold is critical to avoiding further deterioration. A successful rebound would validate the structural strength of the rally and set the stage for a potential push toward the $4.16 Fibonacci 1.21 extension—a target aligned with classic Elliott Wave theory [1]. Conversely, failure to defend $3.12 could erode confidence, with the next line of defense at the psychological $3.0 level.

The collapse was fueled by a confluence of factors: regulatory uncertainty, aggressive short-term speculation, and a derivatives market stretched by record leverage. Open interest in XRP futures had ballooned to $10.98 billion in early July, reflecting heightened trading activity as bullish sentiment reached unsustainable levels. The subsequent correction exposed the fragility of leveraged positions, particularly among retail traders who had positioned heavily in longs ahead of the $3.65 peak [1].

The aftermath of the liquidation episode underscores the risks inherent in fast-moving crypto markets. While the $3.12 support level offers a potential floor for stabilizing prices, analysts caution that a breakdown could reignite panic selling. The path forward remains uncertain, with traders closely watching whether XRP can reestablish a base above this critical threshold. A decisive recovery could signal the start of a new bull phase, whereas persistent weakness might deepen the correction, testing the resilience of long-term holders [1].

Source: [1] [Massive Liquidations Hit XRP: $3.12 Becomes the Battleground] [https://coinmarketcap.com/community/articles/6881d40efe21566b6399333d/]