Leverage Unwinds Pound XRP: $47M in Liquidations as Fear Index Hits 11 and ETFs Trickle In

When crypto de-risks, positioning matters more than narratives. Today’s slide was a positioning story centered on XRP.

XRP dropped 15% over the past day to $1.30, the sharpest daily decline among the top 100 tokens. It briefly tapped $1.28—its lowest print since November 2024—and is now down about 28% on the week, according to CoinGecko. The move amplified a broader risk-off tone: Bitcoin slipped below $67,000 before rebounding to just above $68,000, while Ethereum traded near $1,985 (-6% 24h, -30% 7d). Dogecoin changed hands around $0.09 (-8% 24h, -19% 7d), BNB hovered at $666 (-9% 24h, -23% 7d), and Solana fell to $85 (-8% 24h, -27% 7d). Aggregate crypto market capitalization declined 7.4% on the day to $2.37 trillion, far off the peak above $4.2 trillion set in September 2025.

The core tell: forced deleveraging concentrated in XRP. More than $47 million in XRP derivatives were liquidated in the last 24 hours, with nearly $44 million of that on the long side, per CoinGlass. Overall, over $1.43 billion in crypto positions were wiped out across venues. As price slid, XRP spot volume spiked 57% to more than $11 billion, a classic footprint of longs exiting into thin bids.

Here’s why that matters. XRP’s investor base skews toward momentum and headline risk. When sentiment breaks, longs tend to crowd the same exit at once, which mechanically triggers a feedback loop: cascading liquidations push price lower, which invites more de-risking. The Crypto Fear & Greed Index fell to 11—“Extreme Fear”—after briefly touching “greed” territory at 62 in January. That swing doesn’t just reflect mood; it dictates behavior. Traders tighten risk, market makers widen spreads, and marginal liquidity recedes—conditions under which a highly owned long can underperform peers.

The institutional overlay intensifies the reflexivity. Evernorth, which launched as an XRP treasury in October with the stated goal of raising more than $1 billion to accumulate XRP, is now sitting on an estimated $446 million unrealized loss. The firm purchased 388,710,631 XRP in late October for roughly $947 million and has not added since; at current prices, that stash is valued near $501 million. Ripple executives serve as strategic advisors to the effort. A single-asset treasury strategy can work in trending tapes, but it leaves little room for balance-sheet agility during drawdowns. Without active hedging or programmatic rebalancing, mark-to-market hits compound precisely when liquidity thins.

Spot ETFs provide a smoother channel but remain too small to counter a fast leverage reset. The seven U.S.-listed spot XRP ETFs saw $5.9 million in trading volume on Wednesday and net inflows of $6.9 million. Inflows slowed, yet they did not flip negative—a modest signal that some allocators are averaging in. Still, that flow is trivial relative to the day’s $11 billion spot turnover and the $47 million in derivatives liquidations. In other words, the ETF bid is a nudge, not a backstop.

Policy narratives, while important longer term, won’t neutralize a positioning unwind in real time. Ripple’s CEO has been vocal about a strong push to pass a Market Structure bill, but there has been no comment on the market’s bearish turn. This is typical during stress: regulatory optimism often decouples from price action when leverage is the marginal price-setter.

What to monitor from here: - Funding and open interest in XRP perpetuals for signs of cleaner positioning. - Persistence of ETF inflows versus any turn to outflows if volatility stays elevated. - Any risk-management action from large treasuries like Evernorth, which could either stabilize or exacerbate supply. - Bitcoin’s ability to hold above $68,000; if the anchor steadies, altcoin beta usually normalizes.

The takeaway isn’t that demand vanished; it’s that crowded longs met a thinner tape. Until the leverage reset runs its course, reflexive pressure will eclipse fundamentals—and the assets most reliant on momentum and single-asset sponsorship will swing the widest.