Quick overview

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Holders of XRP are currently facing a significant setback as the August cryptocurrency rally encounters its first turbulence. Data from CoinGlass indicated a staggering 7,676 percent imbalance between long and short positions on XRP over the past day.

 

A rapid sell-off occurred within a short time frame, causing XRP’s price to drop by 2.94 percent, from $3.04 to $2.97, as several important support levels were breached.  The one-sided nature of the market pressure makes this situation particularly noteworthy. 138,143 traders were liquidated in the past 24 hours,, the total liquidations come in at $358 million

Bitcoin (BTC) and Ethereum (ETH)  experienced long liquidations worth $41 million and $72 million, respectively. XRP recovered nearly 11 percent by Monday after finding support on Sunday around the 50-day EMA at $2.8. The 50-day EMA is a critical support zone, aligning with the daily level at $2.72 and the 50 percent Fibonacci level at $2.78. However, XRP fell 4 percent on Tuesday and, as of Wednesday, is still trading below $2.92. If the decline continues, XRP could approach its crucial support level of $2.8

The daily chart’s RSI shows a decline in bullish momentum as it falls below the neutral level of 50. The MACD indicator for XRP lends more credence to this pessimistic outlook.

Although XRP is currently holding steady, this incident highlights the risks associated with excessive leverage and suggests that the market is attempting to determine its next move. A recent liquidation event serves as a stark reminder of the dangers tied to unbalanced market conditions, even as the rally persists. The sharp compression of long positions underscores the volatility and rapid price swings that are characteristic of the cryptocurrency market. For XRP holders, this situation serves as a warning about the volatility of crypto trading, particularly when positions become overly concentrated.