XRP's drop to $1.38 on Labor Day triggered forced liquidations and an unusual hourly liquidation imbalance that briefly exceeded 10,535%, according to CoinGlass. The volume of forcibly closed long positions surpassed losses among short sellers by more than a hundredfold. XRP later recovered to $1.3892 from its local low, forming a reversal pattern on lower time frames after its decline from a daily high of $1.4150 activated protective stop-loss orders among highly leveraged traders. The sell-off followed crowded long positioning near the monthly Short Max Pain level of $1.4368, where $9.20 million in bearish positions could be liquidated. By contrast, Long Max Pain stood at $0.9837, more than 28.83% below the current price, with $24.29 million in potential liquidations, indicating that the shakeout remained local. KuCoin and Gate saw net capital outflows as open interest fell 5.16% and 4.07%, respectively, while MEXC's daily trading volume jumped 118.32% as traders bought the dip. Technical indicators moved out of critically oversold territory, creating a local bullish signal, with resistance at $1.4010 now the nearest hurdle for buyers. A break above that level would confirm the end of the evening's bearish microtrend, the source said.