- XRP market sees rare short squeeze after unexpected inflation data.
- Over $426,000 in short positions liquidated, catching traders by surprise.
- XRP price spikes past $3.00 following shock inflation data release.
XRP’s derivatives market experienced an unexpected surge earlier today, with short positions taking a significant hit. According to CoinGlass, over $426,000 in short positions were liquidated, compared to just $14,000 from long positions.
The rare imbalance attracted the traders, and this was an indicator that market activity was being driven by something meaningful. Although total liquidations were not significant as those observed in Bitcoin and Ethereum, the absolute difference between long and short liquidations was notable, and thus, the move was significant in the crypto arena.
Recent statistics on inflation in the U.S. provoked a change in the market. The Producer Price Index (PPI) for August came in below expectations, showing a month-on-month decrease of 0.1%. This outcome was a drastic departure from the expected growth of 0.3%. Also, the yearly PPI declined to 2.6% against 3.3%, the lowest point since June.
Such surprising information created a drastic market variation and resulted in a rapid increase in the price of XRP. A few minutes after release, XRP climbed beyond $3.00, momentarily hitting $3.02, and then went back a bit.
Also Read: JPMorgan Chase Officially Accepting XRP Payments: Fact Check
Short Squeeze Catches Traders Off Guard
The sudden price movement caught those betting on a decline in XRP off guard. As a result, short positions were swiftly liquidated, with most of the losses falling on the bear side. Traders who were looking to see XRP fall further found themselves forced out of their positions, resulting in a major market reset. The derivatives market is now much lighter, and some further volatility may still be possible.
Source: Coinglass
It is unclear whether the reset will give the market an opportunity to recover or whether it will be subjected to another wave of unpredictable movements.
Currently, XRP is holding steady at around the $3.00 level. The following several days will matter greatly in deciding the market direction. Given the immediate impact of inflation data on XRP’s price, the currency could continue to experience volatility, driven by economic reports and broader market sentiment.
Also Read: Gemini’s IPO Surge and Nasdaq Partnership Propel Crypto Exchange Into New Era
