XRP falls to $1.38 as long liquidations outpace ETF inflows

XRP fell to $1.38 on Sept. 8, testing a key support zone as long liquidations accelerated and open interest dropped sharply, even as ETF inflows continued to provide a counterbalancing bid.

Coinglass data shows the hourly liquidation imbalance exceeded 10,535 percent, with the volume of forcibly closed long positions more than 100 times greater than losses from short trades. The cascade followed XRP's pullback from a daily high of $1.4150, which triggered stop-losses for traders holding high-leverage bullish positions.

The derivatives data reveals a market overloaded with leveraged longs. A dense cluster of orders sat near $1.4368 — the maximum pain zone for sellers — and when price failed to hold the local high, protective orders triggered in sequence, accelerating the decline. Across exchanges, open interest contracted unevenly: KuCoin saw OI drop 5.16 percent and Gate fell 4.07 percent, while MEXC daily trading volume jumped 118.32 percent as dip buyers stepped in. Bybit also saw elevated activity.

The divergence between derivatives positioning and spot flows is the central tension. XRP ETF inflows have continued even as futures traders deleverage, suggesting institutional demand is absorbing some of the selling pressure. The SEC litigation over XRP's regulatory status remains a background risk factor — a favorable resolution could support recovery, while an adverse outcome could intensify selling.

Deleveraging Reshapes the Derivatives Book

After the local drop, buyers managed to push XRP back to $1.3892. On lower timeframes, a reversal pattern formed, an early sign of attempted stabilization. The nearest resistance for continued recovery sits at $1.4010, roughly 3.94 percent above current levels, where an estimated $9.20 million in short liquidations could trigger if price rises further.

Downside risk remains significant. The maximum pain zone for buyers sits at $0.9837, about 28.83 percent below the current price, with potential liquidation volume estimated at $24.29 million in that area. The asymmetry between the two liquidation zones shows how much leverage remains concentrated on the long side of the market.

The exchange-level data tells a story of divergent trader behavior. KuCoin and Gate saw participants reduce exposure after the sharp move, cutting open interest by 5.16 percent and 4.07 percent respectively. MEXC, by contrast, saw daily trading volume jump 118.32 percent as traders attempted to buy the dip. Bybit also became a center of short-term speculation. This pattern — one part of the market treating the drop as an entry opportunity while another part is forced to exit — is typical of liquidation-driven moves in altcoin derivatives.

ETF Flows Face the Deleveraging Test

In the coming days, XRP's trajectory depends on whether buyers can hold price near current levels. Holding above $1.4010 increases the chances of a rebound toward $1.4368. A return below $1.3892 would raise the risk of renewed selling, with $0.9837 as the primary downside target.

Traders are also watching broader crypto market conditions — bitcoin dynamics, dollar strength, and Federal Reserve policy decisions all influence risk appetite across digital assets. Ripple's technology updates and partnerships, along with any regulatory developments around the SEC case, remain additional variables. The persistence of ETF inflows will be a key test of whether institutional demand can provide a floor while leveraged positioning resets.

For XRP specifically, the SEC dispute remains one of the main long-term risk factors. A softer outcome could support risk appetite and boost interest in the token, while a tougher scenario could bring renewed selling pressure. But the current episode was driven by market structure and trader positioning, not regulatory news.

This article is for informational purposes only and does not constitute investment advice.