Bitcoin leverage liquidation triggers chain reactions, how does the XRP community respond to market fluctuations

On-Chain Clearing Wave Reveals Market Structure Issues

In recent market fluctuations, Bitcoin experienced extreme price swings, prompting the crypto community to deeply consider market structure. According to monitoring data from The Kobeissi Letter, the entire event chain is as follows: Bitcoin soared from above $80,000 to nearly $90,000, a $3,000 increase within just one hour, triggering $120 million in short liquidations. Subsequently, the market sharply reversed, with Bitcoin falling back to the $86,000 range, causing another $200 million in long positions to be liquidated. This back-and-forth within two hours resulted in a $140 billion market cap fluctuation — a figure that exceeds the total market cap of many mainstream altcoins.

Many market participants are beginning to question: Are these extreme fluctuations natural supply and demand changes, or are they carefully engineered by large traders using leverage and liquidity? When these questions are raised, most analysts tend to believe that structural factors are at play rather than mere market sentiment shifts.

XRP Follows the Wave, Smaller Coins Face Greater Impact

When Bitcoin’s market experiences significant volatility, the entire digital asset ecosystem shakes accordingly. Although XRP’s market cap is much smaller than Bitcoin’s, it also experienced notable price pressure during the same period — quickly rising from around $1.90 to $2.00, then immediately falling back. While the magnitude of this change is relatively small, it reflects the widespread transmission of liquidity squeeze phenomena.

For market participants, this phenomenon hints at a deeper issue: when large institutions manipulate liquidity, the entire market’s pricing mechanism can be distorted. Many observers point out that such rapid reversals often harm retail investors, while only large-cap institutions can profit from them.

Insights from Liquidation Data on Market Game Rules

What makes this event recorded by The Kobeissi Letter particularly noteworthy is that it fully demonstrates the role of leverage trading in the modern crypto market. When a position in one direction accumulates excessively, even minor price fluctuations can trigger chain reactions of liquidations. These liquidations often further intensify price movements, creating a self-reinforcing spiral.

Industry insiders generally believe that although these events seem unpredictable on the surface, they may actually follow exploitable patterns. Some large traders might accumulate positions in the market and then use large orders or cancellations to induce price changes, thereby triggering liquidations. Once their target is reached, these traders can profit from the opposite positions.

Community Investors’ Response Strategies

In the face of such market environments, the attitude of well-known crypto commentator Digital Asset Investor is worth noting. He publicly stated that he will continue to increase holdings during price pullbacks rather than reduce exposure due to increased volatility. This stance is based on the premise that the current large fluctuations are tactical manipulations by big players, which in turn present opportunities for long-term investors.

This view aligns with advice from other market analysts. Many believe that when XRP and other assets break key psychological price levels, it should be seen as a new accumulation opportunity. According to recent market data, XRP is currently trading around $1.90, significantly below previous highs, which is viewed by some long-term enthusiasts as a phase of accumulation.

Balancing Long-Term Market Logic and Short-Term Risks

It must be clarified that these perspectives are individual analyses and do not guarantee future trends. The volatility of the crypto market remains extremely high, and macroeconomic uncertainties continue to influence pricing.

Although allegations of market manipulation have yet to be officially confirmed, this extreme volatility has indeed prompted industry reflection on trading practices. From Bitcoin to XRP, from large-cap to small-cap coins, the entire market ecosystem is undergoing a structural stress test. In this context, adopting a patient accumulation strategy may be wiser than frequent trading, but risk management should always be the top priority.