XRP Surges as $3 Billion in Liquidations Looms — Is a Short Squeeze on the Horizon?

XRP experienced a notable upswing recently, climbing nearly 3% on Monday to hover around $1.339–$1.35. This increase was primarily influenced by broader market dynamics, particularly recent headlines surrounding U.S.-Iran ceasefire talks, which injected a dose of optimism across the crypto landscape. Meanwhile, Bitcoin stabilized close to $69,870, and Ether lingered around $2,144. Although XRP’s rally wasn’t as pronounced as its peers, it still marked a significant day of trading.

The latest move upwards originated from the $1.28–$1.29 demand zone, characterized by a surge in trading volume, suggesting strong buying interest at that level. This momentum allowed XRP to retake the $1.30–$1.32 range before it faced new resistance.

Analytical insights indicate that XRP is currently confronting a key short-term barrier between $1.34 and $1.355, an area that has historically posed a challenge for the asset. A breaking of this resistance could set the stage for an ascent toward $1.42, with eyes also on the significant supply zone between $1.47 and $1.50.

However, the downward pressure remains palpable. The nearest support levels lie between $1.31 and $1.32, and a slip below $1.28 would result in a return to deeper consolidation levels.

Open Interest and Market Dynamics

Recent reports highlight an uptick in open interest, which rose sharply from $892 million to $951 million, marking the highest figure seen in over two weeks. This shift occurred as price dipped below $1.31, accompanied by negative funding rates at -0.0010, indicating that short traders are currently compensating long traders—a sign of pronounced bearish sentiment in the derivatives arena.

Moreover, concerning liquidation clusters, approximately $3.055 billion hangs above the current price, with $318.57 million concentrated near $1.356. Should XRP venture into this territory, those holding short positions might face intense pressure, potentially fueling further upward movement.

An analysis by Santiment revealed that the average active wallet on the XRP Ledger has suffered a staggering 41% decline in investments over the past year, a grim statistic reflecting the lowest Mean Value to Realized Value (MVRV) reading since the FTX collapse of November 2022. This underscores how many traders are navigating through a challenging landscape of diminished returns.

Despite the positive price movement, Monday’s upward trajectory was not directly linked to developments within Ripple. Notably, Iran rejected Pakistan’s ceasefire proposal shortly after it was floated, raising uncertainties and limiting the risk-on momentum across financial markets.

Looking Ahead

This week promises to be pivotal for the broader financial landscape, as the U.S. economic calendar is packed with significant events. The release of Fed minutes on Wednesday, followed by PCE inflation data on Thursday and CPI figures on Friday, will be closely monitored by investors. Recent shifts, such as Wells Fargo retracting its 2026 rate cut forecast, signal potential volatility ahead.

On April 1, Ripple did unveil treasury software that includes XRP balance tracking, and CME has introduced XRP futures options on its CFTC-regulated platform. However, as witnessed on Monday, macroeconomic developments remain the predominant influence on price behavior.

XRP continues to operate within a falling channel established since its July 2025 peak of approximately $3.60, with attempts to break out at various levels, including $3.18, $3.10, $2.41, and $1.60—all failures thus far.

The market’s current positioning suggests a watchful eye on this volatility, as traders weigh the potential for either a short squeeze or further consolidation, all while navigating the ongoing complexities of both the crypto ecosystem and the traditional economic landscape.

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originally published at CoinMagazine