this will cause the bounce from the recent falls to be a 'super bounce'
The more shorts the bigger the eventual short squeeze when prices find a bottom and bounce a few %, as people have to cover in panic or face potentially higher losses.
This buying pressure causes price to rise even more thus creating a positive feedback loop when shorts are really high - this happens in all markets, a good example this year was the VIX explosion in February after having record shorts.
The fact that shorts on XRP dropped means that people bought XRP to cover - but the price didn't really jump, which is actually bearish.
If shorts go back up to resume their correlation with increasing BTC/ETH shorts, the XRP price dip will be more severe.