its based on placement from regular gnw. win in your server and you go to xgnw, if you get 2nd place in your server then you might join xgnw based on your groups power ranking. group lvl has nothing to do with it.

when fighting in xgnw who you fight r1 is mostly random. the winners of r1 fight in r2, winners of r2 fight in r3, losers fight losers in the same way.