Amid the latest XRP price pullback, on-chain and derivatives data show that market positioning has moved increasingly toward the short side.
Notably, investors appear to be preparing for further downside as XRP loses ground and selling pressure strengthens across both the spot and derivatives markets.
XRP Short Positioning Spikes
XRP derivatives positioning has changed over the past 72 hours. Between Aug. 4 and 7, Binance XRP open interest rose from about $180 million to $195 million, an increase of roughly 8%.
Meanwhile, during the same period, Binance perpetual CVD fell from around -$292 million to -$363 million, representing a decline of about $71 million.
The rise in open interest alongside the drop in perpetual CVD indicates that there are new short positions entering the market. Specifically, traders are adding leverage while selling pressure increases, as more derivatives traders are positioning for another move lower.
Spot Buying Pressure Fades
Further, the spot market has also lost strength. Estimated XRP spot CVD across centralized exchanges dropped from about $235 million to $112 million between Aug. 4 and 7. This represents a decline of more than 52%.
Meanwhile, spot CVD remains positive at $112 million, but the sharp fall from $235 million shows that buying activity has weakened massively. Buyers are still present, but they are no longer providing the same level of support from earlier in the period.
All this data confirms a change in XRP’s short-term market structure. Spot demand has weakened, while derivatives positioning has moved further toward the sell side. The next major signal will be whether Binance open interest continues to rise as perpetual CVD falls further into negative territory.
Long Liquidations Trigger Increased XRP Short Positioning
Coinglass liquidation data shows why most investors have resorted to short positioning. Notably, long liquidations have dominated across several timeframes, indicating that traders who expected XRP to rise have taken most of the losses during the recent decline.
On the 4-hour timeframe, XRP recorded $6.30 million in total liquidations, including $6.27 million from long positions. Longs therefore accounted for 99% of all liquidations during that period.
Over 12 hours, total liquidations reached $7.51 million, while long liquidations stood at $7.46 million, giving them a 99.3% share.
The trend is also present over 24 hours, when XRP recorded $9.60 million in total liquidations. Long positions accounted for $9.48 million, or 98% of the total. These figures show that bullish traders have borne most of the pressure as XRP moved lower.
XRP Drops Toward $1 as Shorts Increase
The wave of long liquidations has come as XRP fell from the $1.05 to $1.08 range to a current price of about $1.0296. The decline has put more pressure on traders who positioned for a recovery and has strengthened the bearish mood across the market.
As XRP continues to correct and long liquidations rise, more investors have turned bearish, leading to the increased XRP short positioning. However, the growing short bias could eventually work against them if XRP stages a strong recovery.
A sharp rebound could force heavily positioned short traders to close their positions, potentially triggering a short squeeze.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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