The latest US inflation report triggered a wave of forced short-position closures across the digital asset market, according to CoinGlass. The main beneficiary of the local short squeeze was $XRP. Against the backdrop of a price impulse, the asset not only recorded a critical liquidation imbalance but also broke through key technical resistance levels on the 4-hour chart.
How PPI data trapped $XRP bears
The catalyst for the large-scale repricing of risk was the release of data from the US Department of Labor. Producer price inflation for June delivered a surprise, falling into negative territory for the first time in months: the index declined by 0.3% month over month against a forecast of 0.0%, while the annual rate slowed to 5.5%.
Cooling wholesale prices eased concerns about tighter Federal Reserve policy, weakened the dollar, with the DXY falling to 100.562, and opened the door for capital to flow into cryptocurrencies. Bitcoin quickly consolidated above $65,244, while Ethereum climbed to $1,927.42.
$XRP followed the market leaders, with its price staging a powerful technical breakout on the 4-hour timeframe. Even before the data release, the RSI indicator had formed a bullish divergence, signaling that sellers were becoming exhausted.
Immediately after the report was published, $XRP broke above the $1.0964 and $1.1127 levels with a strong green candle, briefly consolidating at $1.1261. The move allowed the asset to rise above the long-term trendline that had constrained the chart since mid-May.
The vertical surge caught retail traders who had opened leveraged short positions off guard. According to CoinGlass, forced liquidations over the past 24 hours were distributed as follows:
- Short-position liquidations: $2.56 million.
- Long-position liquidations: $593,260.
Bearish traders lost 4.31 times more than bulls, creating a liquidation imbalance of exactly 331%. The capitulation of sellers and the breakout from the multi-month downtrend have established a strong foundation for $XRP. This technical threshold is now set to become a key support zone throughout the third quarter of 2026.