XRP Increase in Long Positions Strengthens Long Squeeze Possibility

At first glance, it appears that leverage usage has increased again as the price drops. #XRP price has fallen from approximately $1.40 to the $1.17 region. The Estimated Leverage Ratio has risen from 0.13 to 0.18 in recent weeks. The funding rate is mostly in the negative zone. This indicates that many traders are opening longs at the bottom. Therefore, most investors could suffer losses due to a long squeeze.
According to the chart, it is clearly understood that the short-term downward risk will continue. Because the price drops while leverage increases. This is generally not a healthy structure. Funding is negative. Although it shows there is short dominance in the market, the inability of the price to react indicates weakness. ATR is at historical lows. Volatility is severely compressed. Such a significant drop in ATR usually signals an approaching large downward move.
Based on the price structure in the chart, the first strong support is at the $1.10 - $1.15 level. Currently, the price is just above this region. The second support is at $1 - $1.05, which is a psychological level where buyers may concentrate. Below $1, investors might start panic selling. If leveraged long positions begin to be liquidated, it is possible for the price to quickly drop below $1.
When the Estimated Leverage Ratio drops below 0.18, funding becomes sharply negative and then neutralizes, and the price holds around the $1.10 - $1.15 zone, we can understand that the bottom has been found. However, this chart does not indicate that the absolute bottom has been reached. On the contrary, it shows that there are still unliquidated long positions in the market due to the increasing leverage as the price falls. Therefore, there is a potential for a liquidation wave in the short term.
⚠️ #this is not an advertisement or investment advice. The analysis reflects my personal opinion. It does not guarantee certainty.