XRP Logs 10,535% Liquidation Imbalance Within an Hour as Price Falls to $1.38

XRP's Labor Day slide to $1.38 set off a cascade of forced margin calls, producing a rare anomaly in market microstructure. According to CoinGlass, the asset's hourly liquidation imbalance briefly exceeded 10,535%, meaning the volume of forcibly closed long positions exceeded short sellers' losses by more than a hundredfold.

For context, liquidations occur when exchanges forcibly close leveraged positions because losses have eaten through the trader's margin. They tend to cluster in thin trading conditions — such as U.S. holidays, when spot market depth is reduced — which can amplify price moves in one direction and trigger further forced selling, a dynamic often called a liquidation cascade.

By press time, XRP had already bounced off its local bottom and was trading at $1.3892, forming a reversal pattern on lower time frames.

The rapid decline in XRP/USD from its daily high of $1.4150 triggered protective stop-loss orders among highly leveraged traders. While most of the market's attention was fixated on large daily losses in Bitcoin ($10.72 million) and Solana ($4.55 million), an instant technical storm unfolded in XRP's order book.

Why XRP's local sell-off is not yet a reason to panic

The root cause of the aggressive long squeeze was overcrowded positioning near the critical Liquidation Max Pain zone. On the monthly horizon, XRP's price came close to the point of maximum pain for sellers — Short Max Pain at $1.4368. Traders who had accumulated long positions in anticipation of an inevitable breakout above this barrier created an excessive concentration of orders sensitive to any price fluctuation.

The price now sits only 3.94% below the short-side pain level, where $9.20 million in bearish positions could be liquidated. The long-side level, Long Max Pain at $0.9837, remains more than 28.83% below the current price, with $24.29 million in potential liquidations — confirming the local nature of the current shakeout.

Exchanges reacted to the incident in opposite ways. KuCoin and Gate recorded net capital outflows, with open interest falling 5.16% and 4.07% respectively. MEXC and Bybit, meanwhile, became the epicenters of the speculative battle. Daily trading volume on MEXC jumped 118.32% as traders aggressively bought the dip during the liquidation event itself. Open interest — the total value of outstanding derivative contracts — is often watched as a gauge of how much speculative leverage remains positioned in the market.

That impulse-driven buying returned the price to $1.3892. Technical indicators moved out of critically oversold territory, generating a local bullish signal.

The nearest obstacle for buyers is now the resistance level at $1.4010. A breakout above it would confirm the definitive end of the evening's bearish microtrend. Beyond that, the Short Max Pain zone at $1.4368 remains the key level the market had been watching before the squeeze, and how price behaves between these two thresholds will show whether the shakeout fully cleared the overcrowded positioning.

Source: U.Today