These key indicators suggest that there is more to the recent Dogecoin and XRP pumps than just short liquidations.

From January 30 to February 1, the XRP price increased by 147%, hitting the $0.76 mark, which is a two-month high. The move appears to have been driven by r/Satoshistreetbets, an offshoot of r/Wallstreetbets.

It seems that speculation based on social media groups is becoming mainstream, so let’s see what triggers may have been driving XRP’s recent price rise.

XRP Twitter Activity vs Price | Source: TheTie

Data from TheTie, an alternative data provider focused on social analytics, shows a significant impact of positive Twitter users on XRP price.

Even Gene Simmons, legendary musician of the rock band, KISS, told his nearly 900,000 followers:

“Do not recommend any of these to anyone. But yes, I also bought Dogecoin, XRP and others. Just do what you are going to do.”

Is there short interest behind this move?

Knowing exactly what triggered investors to flock to XRP can uncover a set of criteria that are applicable to other cryptocurrencies.

Hedge funds with substantial short positions are what drew investors to GameStop and AMC stock. By incorporating Pump into these companies, buyers know that it will force short positions to be liquidated and trigger the start of a strong rally.

A look at Bitfinex’s Long-Short ratio shows that there are now a total of $124 million in margin trading a mix of dollar and BTC-based markets. While that number is up from $95 million a month ago, it’s more important to focus on the percentage favoring Shorts.

XRP Long to Short Ratio | Source: Bitfinex

The Long-Short ratio seen on Jan. 29 favors longs to 180% and this is the opposite of what is needed for a short squeeze. Furthermore, that $25 million margin is nominally insignificant to XRP’s $1.55 billion average daily volume.

The futures market, on the other hand, holds $277 million in open interest (OI), unchanged from the previous month. But unlike the margin market, buyers and sellers are always matched.

XRP Futures Open | Source: Bybt.com

As described above, despite the liquidations caused by the recent 147% rally, XRP’s open interest has increased in nominal terms due to its rise in price. To understand whether those traders are using excessive leverage on both sides, one should focus on the futures funding rate.

When the sellers (short) are the ones who claim more leverage, the funding rate will be negative. Therefore, those traders will be the ones paying the fees.

XRP Futures Open | Source: Bybt.com

As shown above, buyers used more leverage. Although relatively stable over the past 30 days, the last time negative funding rates occurred were December 24 and December 29. Both days mark local lows following significant price corrections due to the crash. caused by the SEC’s XRP lawsuit.

Therefore, it is safe to assume that r/Satoshibets did not choose XRP based on short margin trades or leveraged futures trades.

Aside from being a sub-$10 coin, XRP is one of the farthest from its all-time high. It should also be noted that, prior to the recent 1,000% Pump, Dogecoin (DOGE) was also trading below its all-time high of $0.078.

Coins under $10 | Source: Livecoinwatch.com

While it is undeniable that social media investment groups have played some important roles in the recent rallies seen from Dogecoin, XRP, GameStop and AMC, the data does not validate the statement. story that r/Satoshistreetbets chose Pump XRP because of the high spreads on altcoins.

Mr. Teacher

According to Cointelegraph

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