[Digital Today reporter Jinju Hong] XRP plunged on Aug. 22, triggering the biggest liquidation of bullish long positions since Oct. 10 last year. XRP long liquidations that day totalled $38.58 million.

Blockchain outlet Decrypto reported the figure was close to the $39.3 million recorded on Oct. 10 last year, a difference of $720,000. The overall liquidation pattern was very different from then. This time, XRP rose to $1.70 and then quickly slid to $1.42, prompting concentrated unwinding of long positions.

CryptoQuant analyst Amr Taha (암르 타하) said on Aug. 22 that XRP long liquidations reached $38.58 million. Short liquidations the same day were only $6.5 million. Total XRP liquidations were $45.08 million, with longs accounting for 85.6 percent. That meant bullish-position liquidations were almost six times larger than bearish-position liquidations.

The skew was also clear by exchange. On Binance, XRP long liquidations were tallied at $12.63 million and short liquidations at $1.4 million. Long liquidations were about nine times larger, and longs made up about 90 percent of total XRP liquidations on Binance.

The difference is clearer compared with Oct. 10 last year. At the time, short liquidations on Binance were $21.1 million, while long liquidations were $9.82 million. This time, Binance XRP long liquidations were up 28.6 percent from Oct. 10 last year, while short liquidations plunged 93.4 percent.

The same pattern appeared on exchanges other than Binance. XRP long liquidations on other exchanges were about $25.95 million, and short liquidations were $5.1 million. This was also a structure in which long liquidations were about five times larger.

The sharp drop came after a steep rise. XRP hit a year-to-date low of $0.9882 last week, then rose 70 percent in a few days to reach $1.70. As the rapid jump continued over a short period, market participants quickly built up long positions. When the price then retraced 16 percent, leveraged positions were unwound all at once.

Large-scale long liquidations can amplify price declines because additional selling occurs as exchanges forcibly close leveraged positions. The unusually wide gap between long and short liquidations, as seen this time, is taken as a sign that many bullish investors did not fully reflect the market pullback.

Still, liquidation data alone do not determine XRP's next direction. Liquidation indicators more strongly show the price levels at which leveraged traders were pushed out of the market. Even after the recent decline, XRP is maintaining gains of 50 percent on a weekly basis and 38 percent on a monthly basis. That leaves the next point to watch as whether the easing of short-term overheating leads to further adjustment or ends as increased volatility within an uptrend.