Ripple's $1 billion acquisition failed to boost XRP prices: 70% of long positions face liquidation risk.

Despite Ripple's recent completion of a significant acquisition valued at $1 billion (including the GTreasury deal), which is seen as a key turning point for XRP's institutional adoption, the price action of XRP has been barely affected, indicating that short-term market sentiment remains subdued. In Q4, XRP has become the worst-performing coin among the top five large cap assets, with a monthly fall of 17%. More concerning is that 70% of the perpetual futures volume in the derivatives market is dominated by long positions, and in an environment where market risk appetite is not fully established, XRP faces a significant risk of a chain long squeeze.

Institutional positives fail to translate: XRP falls out of the large cap assets list

Ripple's recent $1 billion acquisition (particularly the deal with GTreasury) has attracted media attention as it opens the door to a $120 trillion market, signaling that significant institutional capital may flow into XRPL in the long term.

· Long-term bullish: This transaction has released a strong institutional signal to the market, indicating that serious capital is ready to flow into the XRPL ecosystem.

· Short-term response is tepid: However, the excitement fades quickly, and its impact on XRP price action is minimal, reflecting the lack of strong bullish conviction among short-term traders.

According to the chart, XRP had a difficult start in the fourth quarter, with a monthly fall of 17%, making it the worst performer among the top five assets by market capitalization. This aligns with the generally “cautiously optimistic” tone in the market.

Derivation Market Imbalance: Risks of Excessive Long Positions

Against the backdrop of weak spot prices, the Ripple Perptual Futures market has tilted significantly, accumulating a large number of long positions, laying the groundwork for potential volatility.

· Long positions dominate: In the futures trading volume of XRP/USDT on mainstream CEX, long positions accounted for over 70% this month.

· “Blind” optimism: Analysts question whether this position distribution has the support of the broader market under the short-term price action lacking fundamental support, or if the cautious sentiment has turned into “blind” optimism.

SEC Review and Strategic Bets by Whales

This week (October 18 to 25) is crucial for Ripple as the market will closely monitor the U.S. Securities and Exchange Commission (SEC) response to the applications for exchange-traded funds (ETFs) from five major institutions, including Grayscale XRP ETF.

Whales enter the market to open long positions

· Strategic long positions: Against the backdrop of the upcoming ETF review, two whales have jointly opened long positions of 450,000 XRP, which is likely a strategic bet.

· Profit range: In fact, as the spot price of XRP is about $0.20 higher than their average entry price of $2.15, these two positions are currently in profit.

High-risk settings and long positions squeeze risk

· The market has not shifted towards risk appetite: Despite these strategic long positions, the short-term price trend of XRP remains a high-risk setting. Large cap assets are still trading below critical support levels, and the recent plunge's “scars” are still vivid, with market sentiment not yet fully shifting towards risk appetite.

· Liquidation risk: Against this backdrop, XRP's attempt to break through the $2.50 mark is likely to trigger a chain of long position squeezes.

Conclusion

Ripple's $1 billion institutional expansion initiative paints a bright long-term outlook for XRP, but the price has failed to respond in the short term. The overly concentrated long positions in the derivation market, combined with the current market's cautious sentiment and the upcoming SEC ETF review, pose significant liquidation risks for XRP. Investors should be wary of the significant discrepancy between this spot weakness and the overly bullish contracts.

Disclaimer: This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make cautious decisions.