XRP Skyrockets: 1,122% Liquidation Imbalance After CPI Shock

XRP saw a 1,122% liquidation imbalance after softer US CPI data, triggering a short squeeze and rapid price surge. Over $70,000 in shorts were liquidated in an hour, highlighting XRP’s role as a liquidity proxy.

XRP experienced a dramatic surge in derivatives market activity following the release of a lower-than-expected US Consumer Price Index (CPI). The softer inflation data triggered a market-wide shift, leading to a 1,122% imbalance in liquidations, with $70,180 wiped from short positions compared to $6,270 from longs within an hour. This sharp asymmetry resulted in a significant short squeeze, forcing short sellers to buy back their positions and driving XRP’s price upward. The event highlighted XRP’s role as a liquidity proxy, with traders rapidly adjusting to the new macroeconomic outlook and expectations of a more dovish Federal Reserve. Open interest in XRP futures climbed above $4 billion, and options data showed a preference for calls, indicating bullish sentiment. Despite the intense leverage, funding rates remained steady, suggesting the market was not at risk of overheating. Analysts noted the technical resistance at $2.08 as a key level to watch, while the overall episode underscored XRP’s sensitivity to macroeconomic signals and its unique market structure compared to other major cryptocurrencies.