XRP Rallying To $1.96 Has Led To The Liquidation of Long Traders

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XRP
XRP

The holders of XRP possibly couldn’t have asked for a better period with the cryptocurrency rallying to a limit of 800% while flirting with a level of around $2 on the 14th of April. What is even more fortunate is that they have been achieving this height despite the SEC having a dispute with Ripple over unregistered securities offering. Yet, 6 hours into the rallying of the price of this altcoin, XRP crashed by around 20%. In an interview, Barry Silbert mentioned that it was going to be quite risky for most of the exchanges and companies across the States to bring back XRP before it received the approval of the SEC.

XRP Is Feeding Off Of Ripple’s Legal Battles

The last two weeks have seen that the main catalyst for the rally of XRP has been their victories that Ripple has attained in its legal battles. Most of the lawyers who have represented Ripple have already been given access to major discussions of the SEC mostly about cryptocurrencies, and a disclosure on the financial records of Ripple- which was later denied by the court. 

If the present rally is taken under consideration, there is no reason why a particular point of price correction should be taken as gospel. Regardless, the long liquidation worth an impressive $420 million for the last 24-hours has gone way above the one that took place on the 1st of February- when this cryptocurrency managed to crash by around 46%. 

One of the main reasons that could possibly explain this liquidation is the leverage that most buyers are using currently. In order to prove that such a hypothesis is correct, one absolutely needs to analyze the contracts that are funding it. In order to balance one’s risks, most of the exchanges taking place will either be too long or short- which will depend on the leverage demanded by either side.