A major imbalance in XRP margin positions has been recorded on the derivatives market, as a six-month downtrend kept pushing quotes lower from the $3.50 peaks, while June’s 8.19% drop since the start of the month triggered a mass closure of long positions.
The fall below the psychological $1.25 threshold sparked a long squeeze, during which exchange protection algorithms forcibly liquidated $18.57 million in long positions, while short sellers lost only $1.15 million, according to CoinGlass.
This liquidation imbalance, which reached 1,614% and almost 16 to 1, marked a short-term split. While margin participants were being closed out by stop-losses, large funds began buying the dip through the spot market.
Retail panic meets institutional interest for XRP
The breakdown below $1.25 handed control over the dynamic to automated trading systems, which started liquidating leveraged positions in waves. Market-price selling pushed XRP down to $1.2264 within hours, dragging the asset into a downward zone from which, if broader market pressure persists, a technical path opens toward a test of the lower Bollinger Band at $0.9521.
However, where speculators were taking losses, spot buyers saw a discount. On the very same day that derivatives platforms were closing retail longs, U.S. spot XRP ETFs attracted $4.13 million in net inflows.
Against the backdrop of large-scale withdrawals from other crypto assets, including more than $519 million in net outflows from Bitcoin ETFs, the stable inflow into XRP confirms that institutional participants are using this drop for planned position accumulation.
The current washout of excessive leverage moves the market into a phase of positional confrontation, with the total balance of XRP ETFs holding above $1.4 billion.
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If capital inflows into the funds maintain their current pace, the support zone formed around $1.20-$1.22 could become a local bottom, from which consolidation may begin with a target of returning to $1.38.
Otherwise, if broader market negativity outweighs local buying, XRP will head toward a test of psychological parity near the $1 mark.
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