XRP experienced a significant downturn on one of the most turbulent trading days of 2025, dropping almost 5% as institutional investors reacted to the debut of the REX-Osprey ETF. This sell-off led to a staggering loss of $11 billion in market capitalization, leaving XRP battling to maintain a crucial support level at approximately $2.77.
The launch of the first U.S. XRP ETF, the REX-Osprey, made headlines by achieving a remarkable trading volume of $37.7 million on its inaugural day, marking it as the largest ETF launch of the year. However, the excitement was overshadowed by a wave of selling from institutional players. Notably, whale wallets were active, with $812 million worth of tokens transferred between unknown addresses during this volatile session.
Market dynamics were further stressed as over $1.7 billion in crypto derivatives were liquidated, predominantly affecting long positions. The current economic landscape reveals a shift, with a cooling inflation rate of 2.18% heightening market expectations for a potential 50 basis points interest rate cut by the Federal Reserve before the year concludes. Amid this backdrop, Bitcoin’s market dominance surged to 57.7%, indicative of a capital shift away from altcoins.
In terms of price action, XRP plummeted from $2.87 to $2.77 within a single 24-hour period, marking a 4.9% decrease and showcasing a trading range of $0.14. A particularly alarming ‘flash crash’ occurred around 06:00 GMT, which saw the price decline sharply from $2.87 to $2.77 on an extraordinarily high transaction volume of 656.1 million — significantly above the daily average of 105 million.
During intraday trading, resistance at the $2.87 mark proved resilient as repeated rejections at this level contributed to the formation of a downtrend channel characterized by lower highs. Following a brief recovery peak at $2.86 by 13:00 GMT, the price stalled and consolidated between $2.83 and $2.87. Ultimately, a decline in the final hour took XRP from $2.85 to $2.83, closing the day at approximately $2.83.
From a technical analysis perspective, the critical support level remains at $2.77, established during the flash crash, while a secondary support around $2.82 is also being closely monitored for potential retesting. On the resistance side, the heavy supply zone at $2.87 indicates bearish sentiments due to lower highs, thereby reinforcing the downtrend. The volume spikes during the price drop signify active selling pressures from major market players.
As traders navigate the current market environment, key points of interest include whether the $2.77 support will withstand additional testing after the recent sell-off, and how second-day demand following the ETF launch will influence price stability. Additionally, movements in whale wallets, particularly following the substantial transfer during the tumultuous session, will be scrutinized closely. Market players will also keep an eye on the Fed’s monetary policy trajectory, as it is set to impact dollar liquidity and potentially influence altcoin performance amidst Bitcoin’s dominant resurgence.
