XRP Getting a Little too Cozy At The Bottom?
April 7 wasn’t precisely a glorious day for our beloved XRP stakes. With the broader crypto market selling off and a smoky trade war smoldering into its third day, XRP decided it was time to hit the snooze button and take a nap. And by nap, I mean a nearly $60 million plummet in XRP futures positions which were liquidated over 24 hours. Yes, it was that kind of day.
Growing Pains — The Tariff War’s Influence
Perhaps it was the price XRP had to pay (literally) as a reactive member of the broader crypto market, which went on a risk-off tangent recently due to the charming Mr. Trump’s fondness for trade tariffs. Our unpredictable former President decided to target nations like China and the EU, slapping steep import taxes into the already strained global economic mix.
Seriously, if anything’s going to scare off a robust digital currency like XRP, it’s the global uncertainty that comes with the possibility of a large-scale trade war. The fear among investors is that these economic shenanigans could lead to a drop in international trade volume which could then dampen demand for XRP and, therefore, its price.
XRP Making a Cascade?
The April 7 episode was complemented by crucial large-scale liquidations in the derivatives market, specifically over $59 million worth of long XRP positions liquidated — which, for you crypto newbies, isn’t exactly a promising sign. Additionally, $11.56 million in short liquidations occurred.
The size of these liquidations eerily echoes the period between Feb. 2 and Feb. 4, when, hold onto your hats, a monstrous $112.25 million in long XRP positions were cleared off the board. This ear-splitting crash was accompanied by a 40% price drop from $2.97 to a four-month low of $1.76.
Run! Derivatives Traders are Bored!
The derivatives market seems to be having a ‘blah’ moment, reflected by XRP’s performance. There’s little enthusiasm reflected in its derivatives, as seen with the sneezed upon open interest: $2.87 billion and 63% below its peak of $7.8 billion on Jan. 18. In other terms, less capital is meandering into the market, meaning buying pressure isn’t exactly piling up, contributing to our lovely price decline.
Some additional pickle in the sandwich is the pessimistic funding rates in XRP perpetual futures markets, because why not deal with more complications, right? This has been hanging negative since early March, and whenever it turns negative, those betting against tend to pay the enthusiasts to keep their positions open. Translation? Slightly more pessimistic sentiment. Ah, lovely.
Before We Go…
I should remind you, dear readers, that, in case you forgot, neither investment advice nor recommendations are served in this dish. Every investment comes with a side of risk, and it’s up to you to do your research before ordering. But hey, if you’re feeling up to it, pop back over here anytime for a little more light-hearted crypto commentary. Stay
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