XRP’s 40% Drop and Quick Recovery: What Really Happened?

On October 11, 2025, the cryptocurrency market experienced one of its most dramatic moments of the year. XRP, a digital asset commonly used for cross-border payments, fell sharply by more than 40% in a single day. The price dropped from around $3.10 to roughly $1.86 before sharply recovering to about $2.65 by the end of the day. This movement created confusion, debate and speculation across the crypto community.

The price action raised an important question, was this a temporary shock that cleared out weak investors, or could it be the start of more serious challenges? Understanding what happened on that day means looking at trading behavior, overall market conditions and how investors reacted.

The following table shows how the price moved over the course of the day:

 

Stage	Approximate Price	Percentage Change
Previous High	$3.10	—
Intraday Low	$1.86	-40%
Closing Price	$2.65	+28% from the low

 

This was the largest single-day drop XRP had experienced since the collapse of FTX in 2022. The shock wiped out billions of dollars in market value and pushed trading volume to about $12.5 billion within hours.

No major XRP-specific news was announced that day. Instead, the drop was tied to a broad shift in investor mood across global markets. Concerns related to U.S. trade tensions and signals from the Federal Reserve made many investors more cautious. As people reduced exposure to riskier assets, cryptocurrencies were among the first to be sold.

XRP was especially vulnerable because many traders had taken on leveraged positions borrowing funds to increase the size of their trades. When prices started falling, these positions were automatically liquidated. According to data from platforms that track futures and margin trading, more than $800 million in XRP long positions were wiped out in only a few hours. This added momentum to the drop and caused further panic selling. Interestingly, Bitcoin, which usually acts as a reference point for the market, fell only about 5% on the same day. This highlighted how sensitive XRP was to rapid changes in trading conditions.

After falling to the low of $1.86, buyers quickly returned. Many saw the drop as an opportunity to purchase XRP at a deep discount. The price rose back above $2.50 before the day ended and eventually closed near $2.65. That represented a 28% rebound from the bottom. Several factors encouraged this recovery. The XRP community remains active and supportive, and there were ongoing expectations surrounding exchange-traded fund (ETF) developments. Ripple, the company most associated with XRP, had recently made progress on regulatory matters, which further supported investor confidence. Technical analysis also played a role. A common area of support appeared near $2.50, and once the price bounced above that level, many traders entered again. Resistance is now seen around the $3 mark. If the price moves above that line convincingly, many believe the next significant target would be around $4. On the other hand, if the price falls back below $2.50, it may reopen the path to $2 or even lower.

Online discussions ranged from confident predictions to urgent warnings. Some analysts described the drop as a “bear trap,” meaning a sudden decline designed to push out nervous holders before the asset continues rising. Others argued that such a large fall without news revealed deeper fragility in the market. Video analysts and commenters pointed to the high trading volume as a sign that many speculative traders exited their positions. Supporters argued that clearing out leveraged traders could make the price more stable in the future. Skeptics focused on the idea that falling more sharply than Bitcoin might indicate underlying weakness compared to other assets. The reaction on forums and social media platforms reflected a mix of caution and enthusiasm. Optimists discussed the potential for a rebound to $3.50 or even $4 if broader conditions improve. More conservative voices pointed out the risk of another drop to the $2 range if uncertainty continues.

Who Is Affected?

Several groups felt the impact of this event:

Individual XRP holders faced emotional and financial stress. Those who sold during the fall likely locked in losses, while anyone waiting for a rebound faced uncertainty about whether the price would keep recovering or fall again.

Institutional investors observed the trading volume and volatility closely. The sharp drop can act as both a warning and an opportunity. High liquidity makes it easier to enter or exit positions, but fast price changes require strong risk management.

Developers and projects in the Ripple ecosystem were reminded of how quickly sentiment can shift. A sustained rebound could attract new partners and investors, while extended declines might slow ecosystem growth.

The broader altcoin market often takes cues from major assets like XRP. If XRP maintains its recovery, other altcoins may benefit. If it weakens again, it could signal broader caution across secondary digital assets.

What Happens Next for XRP?

Much depends on whether support around $2.50 continues to hold. If buying pressure remains strong and the market mood improves, XRP may climb toward $3 and eventually test higher levels, such as $3.50 or $4. The possibility of ETF approvals adds another layer of speculation, as such developments could attract new investment flows. However, global economic conditions still influence crypto markets. If anxiety about inflation, interest rates or trade challenges becomes stronger, risky assets could face renewed selling pressure. Under those circumstances, XRP could revisit the $2 zone or even lower targets around $1.50.

The 40% drop and quick rebound revealed both the vulnerability and strength of XRP. The event showed how sudden liquidations and macroeconomic worries can trigger large sell-offs, but also how rapidly the market can respond when buyers see value. For many observers, this moment reflects the unpredictable nature of 2025’s crypto environment: fast declines followed by swift recoveries.

Whether this was a one-day reset that clears the way for higher prices or a warning of deeper instability will become clearer in the weeks ahead. What is certain is that the day’s events highlighted the importance of understanding market behavior, managing risk and watching key price levels.