XRP experienced a significant downturn in one of its most tumultuous trading days of 2025, plummeting nearly 5% as institutional investors capitalized on the recent launch of the REX-Osprey ETF. This “sell-the-news” phenomenon led to a staggering loss of $11 billion in market capitalization, leaving the digital asset grappling to maintain critical support at $2.77.
Background on ETF Launch
The inauguration of the U.S. XRP ETF through REX-Osprey was marked by a record-breaking performance, posting an impressive $37.7 million in volume on its first day, marking the largest ETF launch of the year. However, the excitement surrounding the event quickly turned into a wave of profit-taking, as illustrated by the movement of $812 million worth of XRP among whale wallets during this trading session.
Additionally, the cryptocurrency derivatives market witnessed $1.7 billion in liquidations, predominantly affecting long positions, which accounted for approximately 90% of the liquidated contracts. On the macroeconomic front, the recent decline in September’s inflation rate to 2.18% hints at a potential shift in Federal Reserve policy, with markets now pricing in a 50 basis point interest rate cut ahead of year-end.
Price Action Overview
The price of XRP saw a dramatic fall from $2.87 to $2.77 over the course of just 24 hours, marking a drop of 4.9% within a narrow $0.14 range. A sharp decline occurred at 06:00 GMT, where the price dropped from $2.87 to $2.77 on a notable trading volume of 656.1 million, six times the average daily volume of 105 million. The token faced repeated resistance at the $2.87 level, which solidified as a key barrier throughout the day.
After briefly recovering to $2.86 by 13:00 GMT, XRP struggled to gain upward momentum. Afternoon trading revealed consolidation between $2.83 and $2.87, but sellers eventually took control, pushing the price down further. In the final hour of trading, XRP slipped from $2.85 to close at $2.83, marking a decrease of 0.7%.
Technical Analysis
Currently, $2.77 stands as a pivotal support level following the flash crash, with a secondary support point noted at $2.82 awaiting potential retest. In terms of resistance, a substantial supply zone has formed at $2.87. The price action shows a pattern of lower highs and lower lows, indicating a short-term bearish channel.
Volume during the crash—656.1 million—contrasts sharply with the average of 105 million, underscoring the degree of institutional selling pressure. Momentum indicators reveal a bearish skew, raising concerns over the potential for further declines toward the $2.75 to $2.70 region if the $2.82 level fails to hold.
What to Watch Moving Forward
Traders are closely monitoring whether the $2.77 support will endure a second test following the initial flash crash. Additionally, with the ETF’s second-day performance yet to unfold, there is a keen interest in seeing if demand will stabilize XRP’s price or reinforce the narrative of a sell-the-news event.
The behavior of whale wallets remains a point of intrigue, especially after the substantial movement of assets during the session. Furthermore, the Federal Reserve’s evolving rate cut strategy and its implications for dollar liquidity could also influence market dynamics. With Bitcoin dominance rising to 57.7%, it’s likely that altcoins, including XRP, will continue facing pressure in the coming days.
