In a surprising turn of events, short sellers in the crypto market have been hit hard with a massive $218 million worth of liquidations in just 24 hours. This sudden blow came as the market rallied following a favorable ruling for crypto traders, which declared Ripple Labs’ open-market sales of XRP as non-securities.
According to data provided by market intelligence firm Coinglass, the liquidations took place on several prominent crypto exchange platforms. Binance, the world’s largest crypto exchange by volume, saw a staggering $77.7 million worth of short contracts liquidated. Meanwhile, OKX and Bybit witnessed $59.8 million and $30.6 million worth of short liquidations, respectively.
The catalyst for this market frenzy was the highly anticipated ruling on XRP. As the news broke, XRP experienced an astronomical surge, skyrocketing from $0.47 to a peak of $0.82—a remarkable 74% increase within a matter of hours. While XRP has since retraced slightly and is currently trading at $0.78, the effects are still reverberating through the market.
Interestingly, it was not only XRP that experienced significant gains during this period. Many virtual assets witnessed double-digit price increases, fueling the liquidations. Solana, a smart contract platform, rallied by 18%, while layer-2 scaling solutions like Arbitrum and Optimism saw increases of 11% and 13% respectively.
Ethereum and its rivals also made notable gains, with Cardano and Avalanche experiencing respective increases of 16.5% and 15%. Stellar, a payments platform, saw a staggering 31% increase, while ApeCoin, the digital asset associated with the Bored Ape Yacht Club non-fungible token (NFT) collection, rose by 18%.
Coinglass further revealed that the four crypto assets that saw the most liquidations of short positions during this period were Bitcoin, XRP, Solana, and Ethereum. As short sellers faced the consequences of their bets against these cryptocurrencies, the market witnessed a seismic shift in investor sentiment.
Overall, this sudden turn of events highlights the volatility of the crypto market and the risks associated with short selling. As the industry continues to evolve, traders and investors must stay vigilant and adapt to the ever-changing landscape. Only time will tell how this recent surge and subsequent liquidations will shape the future of the crypto market.