• XRP’s impressive rally clears short liquidations, but raises risks of a long squeeze
• Elevated risk metrics and thin liquidity below $2.50 hinted at heightened volatility ahead

XRP investors have enjoyed significant gains lately following the token’s impressive rally. However, looming risk metrics seemed to hint at potential turbulence ahead. With over 90% of bearish liquidation levels exhausted and normalized risk hitting extreme levels, could this be the perfect moment to lock in profits before the momentum shifts?

Liquidation heatmaps reveal XRP’s fragile market dynamics

While XRP’s liquidation heatmaps highlighted the token’s impressive rally, they also exposed growing market vulnerabilities. The three-month heatmap revealed dense liquidation clusters in the $3.00-$3.50 range, where most short positions have been cleared, fueling the rally.

However, below $2.50, liquidity thins considerably, suggesting limited support if the price drops on the charts.

The one-month heatmap reinforced this view, revealing near-total exhaustion of bearish liquidation levels and a buildup of long positions in the $3.25-$3.50 range.

This raises the risk of a long squeeze if XRP loses momentum, potentially triggering a sharp sell-off.