Despite a recent bullish breakout and price retest for XRP, intraday traders are predominantly betting on the short side, according to on-chain analytics firm Coinglass. This trend aligns with the broader market’s current bearish sentiment.
Data reveals a significant disparity in leveraged positions:
- Traders are over-leveraged with $26 million in long positions at the $2.40 price level.1
- Conversely, a substantial $67 million in short positions has been placed at the $2.54 level.
This data strongly suggests a prevailing bearish sentiment among intraday traders, indicating a potential for price consolidation around these key levels.
However, the question arises: can these $67 million in short positions trigger a market crash for XRP? The answer is a resounding no.
Why $67 Million Shorts Won’t Crash XRP:
- XRP currently boasts a market capitalization of $141 billion.
- To initiate a catastrophic price collapse, short positions would need to be significantly larger, in the billions of dollars, not millions.
- The overall market cap of XRP is to large for that amount of short positions to have a large effect.2
While the $67 million in short positions may contribute to short-term price fluctuations and consolidation, they lack the necessary magnitude to cause a market-wide crash.
Key Takeaways:
- Intraday traders are exhibiting bearish sentiment toward XRP.3
- Leveraged short positions at $2.54 are substantial, but insufficient to trigger a market crash.
- XRP’s large market cap provides a buffer against relatively smaller short positions.
- Traders should keep a close eye on the $2.40 and $2.54 price levels.
- Market cap is a very important factor when determining how much influence short positions can have.
