XRP was trading around $1.30 on Thursday after a volatile week that saw leveraged traders repeatedly forced out as the Federal Reserve returned to rate hikes after two major shocks hit the market at once.
XRP rebounded 1.2% on September 16 to close near $1.30, after swinging between an intraday low of about $1.25 and a high above $1.31.
It has since stabilised around $1.30, but remains about 10% lower over seven days.
The Fed raised rates by 25 basis points to 3.75%–4% on Wednesday, its first increase since 2023, while saying inflation remains elevated. The Senate’s failure to advance the CLARITY Act added a second shock.
XRP’s selloff flushed out vulnerable longs
The immediate damage was concentrated among leveraged bulls.
Ahead of the Fed decision, about $26.9 million of XRP long positions had been liquidated during the recent volatility, compared with only $3.59 million of shorts, according to CryptoCompass.
That imbalance matters because forced liquidations can turn an ordinary decline into something sharper.
When leveraged longs lose enough collateral, exchanges close those positions automatically, creating additional market selling.
Egrag Crypto told CryptoCompass that “volatility creates opportunity” and identified $1.26–$1.30 as an initial accumulation zone. A deeper selloff would put $1.25–$1.15 into focus.
The macro backdrop was not the only trigger. The Senate voted against advancing the CLARITY Act on Tuesday, delaying legislation designed to establish clearer US rules for digital assets.
XRP therefore absorbed regulatory disappointment and tighter monetary policy while heavily leveraged traders were already vulnerable.
Negative funding changes the next setup
The positioning picture now looks less aggressively bullish.
A latest cross-venue snapshot from ApeX showed Binance’s XRP perpetual funding rate at about -0.0053%, while Bybit remained slightly positive.
Negative funding means short traders are paying longs, indicating that positioning on Binance has tilted away from crowded bullish leverage.
Cryptoinsightuk highlighted a similar setup on KuCoin earlier this week, saying rising open interest had been “matched by negative funding, suggesting that more shorts are entering the market than longs.”
That can create a different type of risk.
If XRP attracts fresh buying while traders remain positioned defensively, shorts may be forced to cover, potentially amplifying an upside move.
More importantly for bulls, reduced long leverage lowers the chance that every modest decline triggers another wave of forced selling.
A healthier recovery would therefore rely less on traders borrowing to chase price and more on genuine spot demand.
Less leverage does not automatically create demand
The reset should not be mistaken for a bullish signal by itself.
Recent CoinGlass data still showed XRP futures open interest near $2.86 billion, meaning leverage remains substantial.
Derivatives activity also continues to dwarf spot trading, keeping futures positioning important for short-term price action.
CryptoQuant contributor Amr Taha recently described XRP’s structure as unusual. His analysis found that derivatives exposure was returning even as aggressive sellers continued to dominate perpetual and spot order flow.
“Fresh derivatives exposure is returning, but the aggressive side of that positioning continues to favor sellers even as price remains relatively resilient,” he wrote.
That is the key caveat. Lower long leverage removes one downside accelerant, but it does not create buyers.
If XRP can hold the $1.25–$1.30 area while funding stays restrained and spot demand improves, bulls can argue that the shakeout created a healthier base.
If leverage rises again without stronger spot buying, the same vulnerability could quickly return.
The post XRP lost its leverage after Fed hike, and that may be exactly what bulls needed appeared first on Invezz
