In a dramatic turn of events on one of 2025’s busiest trading days, XRP witnessed a significant drop, plummeting nearly 5% as institutional investors reacted to the debut of the REX-Osprey ETF. This sell-off led to a staggering $11 billion being wiped off the market, putting the token in a precarious position to defend its critical support level at $2.77.
The launch of the inaugural U.S. XRP ETF, REX-Osprey, marked a notable moment in the cryptocurrency landscape, achieving a first-day trading volume of $37.7 million—the largest for any ETF in 2025. However, this milestone was overshadowed by substantial selling pressure. Whale wallets were particularly active during this trading session, transferring a massive $812 million worth of tokens between unknown addresses. This high level of activity contributed to the turbulence in the market, as crypto derivatives experienced $1.7 billion in liquidations, with around 90% of those coming from long positions amid the bearish sentiment.
Adding to the complexity of the market dynamics was the backdrop of Federal Reserve policy speculation. Recent data indicated that September’s inflation rate had cooled to 2.18%, leading market participants to price in a possible interest rate cut of 50 basis points before the end of the year. As traditional markets adjusted to this news, Bitcoin dominance surged to 57.7%, indicative of a broader rotation of capital away from altcoins.
In terms of price action, XRP experienced a notable crash from $2.87 to $2.77 within just 24 hours. The most significant drop occurred around 06:00 GMT, where the price fell dramatically on a trading volume of 656.1 million—six times the average daily volume of 105 million. This flash crash tested the resilience of the $2.77 support level, which now stands as a critical floor following the abrupt decline. Intraday resistance developed around $2.87, illustrating ongoing selling pressure that prevented a recovery beyond this point. Despite a minor recovery to $2.86 around 13:00 GMT, the upward momentum could not sustain itself, ultimately leading the price to stabilize between $2.83 and $2.87 before facing renewed selling in the final hour of trading, finishing the day at $2.83.
Technical analysis indicates that the $2.77 level is critical for the token’s short-term prospects, with a secondary support level at $2.82 potentially poised for a retest. The heavy selling at $2.87 reinforces a bearish trend, characterized by lower highs and aggressive selling pressure. Volume patterns further validate the institutional dumping narrative, posing risks for a breakdown toward $2.75 to $2.70 if the $2.82 level is breached.
As traders watch the cryptocurrency landscape shift, key factors on their radar include the sustainability of the $2.77 support after the recent crash, the inflows and interest surrounding the new ETF, and the implications of Fed monetary policy on liquidity. The rising Bitcoin dominance suggests that this rotation pressure on altcoins, including XRP, is likely to continue in the near term.
