A cooler-than-expected US producer price index (PPI) report triggered a massive short squeeze in XRP, with forced liquidations of bearish positions surging 331% above long liquidations. The data, released on July 13, showed producer prices falling 0.3% month-over-month against a consensus forecast of 0.0%, the first negative reading in months. The annual rate slowed to 5.5%, easing fears of aggressive Federal Reserve tightening and sending the US Dollar Index (DXY) down to 100.562.
How PPI Data Trapped XRP Bears
Bitcoin quickly consolidated above $65,244, while Ethereum climbed to $1,927.42 as capital rotated into cryptocurrencies. XRP followed suit, staging a powerful technical breakout on the 4-hour chart. Even before the data release, the RSI indicator had formed a bullish divergence, signaling seller exhaustion. Immediately after the report, XRP broke above the $1.0964 and $1.1127 resistance levels with a strong green candle, briefly consolidating at $1.1261. The move allowed the asset to rise above a long-term trendline that had capped prices 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 totaled $2.56 million in shorts versus just $593,260 in longs, a ratio of 4.31 to 1. This created a liquidation imbalance of exactly 331%, meaning bearish traders lost more than four times what bulls lost.
Technical Outlook for XRP
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. The combination of cooling inflation, a weaker dollar, and the short squeeze has shifted market sentiment in favor of XRP bulls, though traders remain cautious about potential volatility ahead.