 ▲ Ripple (XRP) |
XRP (Ripple) continues its weak trend below $1.40, but analysts say the rapid expansion of liquidity across the broader market is increasing the likelihood of sharp price volatility ahead.
According to cryptocurrency media outlet Bitcoinist on March 10, XRP has been trading below $1.40 amid sustained downward pressure following weekend consolidation. Despite the price weakness, major cryptocurrency exchanges have simultaneously seen increases in trading activity and order book depth, significantly boosting daily liquidity. This is interpreted as a signal that market structure and investor behavior may be shifting.
Developer and market analyst Bird explained that a large concentration of short position contracts is clustered above the $4 level on the chart. The prominent red liquidation lines indicate that many traders are betting on XRP’s decline by building leveraged short positions. In this structure, two scenarios could unfold if the price begins to rise.
The first scenario involves short sellers voluntarily closing their positions to limit losses. In doing so, they must buy back XRP, which could generate upward price pressure. The second scenario is forced liquidation. If the price reaches specific liquidation levels, exchanges automatically close positions, which also triggers additional buy orders for XRP.
If forced liquidations begin, a chain reaction could follow. Liquidations may spark further buying, leading to additional short positions being closed, potentially resulting in a rapid surge known as a “short squeeze,” where buying pressure accelerates as short sellers rush to cover their positions. The analyst added that significant liquidity has accumulated at the upper levels of the XRP chart, raising the possibility of a strong price breakout if upward momentum takes hold.
Meanwhile, activity on the XRP network is also increasing. According to the report, daily transactions on the XRP Ledger have risen to approximately 2.5 million. This represents an increase of more than 40% compared to early February and about 25% compared to early January. Compared to periods in 2025 when trading activity had significantly slowed, the figure has more than doubled.
The outlet noted that the rise in transaction activity may reflect expanded real network usage. It also suggested that the Flare Network may have partially contributed to the increased activity on the XRP Ledger. Market participants are closely watching the potential for rapid price movement should a catalyst emerge amid the current buildup of substantial liquidity.
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