The XRP derivatives market experienced a massive shakeout as open interest plummeted by 14.5% over a 24-hour window.
This sharp drop has wiped out a significant amount of leverage, causing open interest on major venues like Binance to fall from recent highs of 255 million down to 215.4 million.
The contraction in outstanding contracts coincided with a sharp price decline that saw XRP crack below the $1.19 threshold, momentarily touching $1.1894.
Massive leverage unwinding
According to market analysts, there is an ongoing leverage unwinding event.
While the perpetual Cumulative Volume Delta (CVD) cratered to a staggering negative 802.8 million, the spot CVD showed a much more modest decline of negative 158.7 million.
This wide divergence indicates that actual physical spot selling was relatively muted. Hence, the bulk of the downward pressure was fueled by over-leveraged traders getting forced out of their positions.
Total trading volume spiked by 32.26% to reach $2.87 billion, showing a massive surge in market activity during the sell-off.
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This volatility triggered a substantial liquidation event. A total of $7.41 million in positions got wiped out over the past 24 hours.
The liquidations were overwhelmingly skewed toward buyers, with long positions accounting for $6.59 million of the total losses, compared to just $812,16k in short liquidations.
Interestingly, the options market painted a slightly more stable picture. Options trading volume surged by 68.59% to $1.99 million, and options open interest managed a minor increase of 1.89%, bringing its total to $71.03 million.
Despite the heavy liquidation of long positions, sentiment among top traders remains structurally optimistic.
The overall 24-hour long/short ratio sits at 0.9246, but individual exchange account dynamics tell a different story.
On Binance, the retail account long/short ratio is sitting at a heavily biased 2.811, while OKX accounts maintain a ratio of 2.31.
More notably, top traders on Binance are holding a long/short account ratio of 3.2499 and a position-based long/short ratio of 1.8864.
Automated liquidations punished over-leveraged long positions, but the most capitalized traders are maintaining their upside exposure.
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