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 After plunging by more than 50% for two consecutive days on the 23rd and 24th, the price of XRP surged by 40% in the past 24 hours, reaching a 52% increase at the highest point of the day. Behind the surprising rally was a massive short squeeze that caused huge moves within hours. It's clear that this rapid rally was fueled by a short squeeze on futures exchanges.  XRP/USD Hourly Chart (Coinbase). It took around four hours for XRP to surge from $0.2536 to $0.3120. It has since fallen back to around $0.3550 on major exchanges including Binance, with its price climbing to $0.3782 at the time of writing. What triggered the massive short squeeze on XRP? On December 23, when the overall market corrected, XRP had the highest liquidation volume, surpassing Bitcoin (BTC) and Ethereum (ETH). Whether it is the crypto market or the traditional financial secondary market, when the price of an asset fluctuates significantly and long (buying) or short (selling) positions are over-leveraged due to expectations, liquidation will occur in the futures market. For example, if a trader uses 10x leverage, the trader can trade 10x his or her capital. However, if the asset price moves more than 10% from the position, the position will be liquidated and become worthless. In the case of XRP, after the SEC filed a complaint against Ripple and two of its executives, a large number of airdrop positions were generated due to excessive bearish expectations. XRP was oversold as the price dropped to a low of $0.2138. But as the market fluctuated wildly against shorts, a short squeeze occurred on December 25. As a result, the XRP price quickly increased within four hours. In the past 24 hours, data from Bybt.com shows that $73.5 million worth of XRP futures contracts have been liquidated.  XRP liquidation volume Some technical analysts have spotted an overly bearish trend and are predicting a short squeeze on XRP. An anonymous analyst known as CryptoISO said: “Now that the news has spread, it is obviously not wise to short a certain currency after such a large decline. After all, there is the possibility of XRP rising. If you don't know when the bull market will come, don't touch it, and don't try to step on it in the short term. If this happens, Coinbase may eventually face the blow of delisting the XRP trading pair. ” XRP is still at risk of being delisted from U.S. exchanges Analysts remain divided on XRP’s short- to medium-term prospects. Some say that even if XRP is considered a security in the United States, it can still be used globally, so the SEC charges alone do not mean the end of XRP. An anonymous trader known as Trusted Crypto said XRP is not recognized as a security in Singapore, Japan and some other jurisdictions. he wrote: “90% of Ripple Group’s customers are not in the United States. More than 90% of Ripple’s trading volume occurs on exchanges outside the United States. It is not recognized as a security in Singapore, the UK, Switzerland and Japan. If you think the SEC’s charges will drive Ripple to zero, you’re probably not thinking objectively and are just wishful thinking. After all, the XRP/USD trade is global. ” Still, the lawsuit could have a significant impact on the coin, as Ripple is a company registered in the United States and the supply of its token, XRP, is managed by U.S. citizens. Therefore, cryptocurrency investor “Neko” said that this is still a big problem that Ripple needs to face. he said: “Although Ripple’s tokens can be traded globally, please don’t forget that the managers of XRP are American citizens and the company is regulated by the United States. If the U.S. Securities and Exchange Commission deems it a security, exchanges that trade with U.S. customers would have to cancel XRP trading or shut down the U.S. market. Although XRP may not necessarily return to zero in the end, it is indeed a big problem before it. ”  WeChat ID: Bit _Time666 Scan and follow it, and go to the encryption appointment together   |
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