XRP's Market Rebound Potential Amid Massive Liquidation Waves

The Volatility of Q3 2025: A Prelude to Rebound

In Q3 2025, XRP experienced one of its most turbulent periods, with a single-day crash wiping out $700 million in long positions and sending the token to a six-month low below $2, according to a Beincrypto analysis. This sell-off was exacerbated by macroeconomic tensions, including President Trump's 100% tariff announcement on Chinese goods, which triggered a broader risk-off sentiment, the report noted. Open interest plummeted from $8 billion to $5 billion, signaling a rapid unwinding of leveraged positions, while derivatives activity surged, with futures and options trading volume exceeding $23 billion-its highest level since July 2025. These dynamics underscored the fragility of leveraged positions and set the stage for a potential rebound in October.

Technical Analysis: A Bullish Setup Amid Liquidation Risks

XRP's price action in October 2025 has formed a descending wedge pattern, with critical support at $2.80 and resistance at $3.02, as Cointelegraph notes. A breakout above $3.02 could trigger a rally toward $3.66, while a breakdown below $2.75 risks a decline to $2.40. Liquidation heatmaps reveal concentrated leveraged positions between $3.05 and $3.10, a zone containing nearly $30 million in long exposure, according to a BitPrismia report. If this range is triggered, cascading liquidations could either accelerate a bearish move or create a buying opportunity for contrarian traders.

On-chain data further reinforces the technical narrative. Coincentral cites Glassnode showing that 4.3 billion XRP were accumulated at the $2.80 support level, which has held through prior corrections. Whale activity, including a $1.2 billion withdrawal from exchanges in late September, suggests growing confidence in XRP's long-term utility. Meanwhile, technical indicators like the MACD and AO show positive momentum, with the token consolidating ahead of a potential breakout, Cointelegraph notes.

Sentiment Analysis: Regulatory Clarity and ETF Catalysts

The most significant catalyst for XRP's rebound in October 2025 is the SEC's pending approval of six spot XRP ETFs, with rulings expected between October 18 and 25, Coincentral reports. Prediction markets price in over 99% odds of approval, which could unlock $4–$8 billion in institutional capital. This follows the resolution of Ripple's lawsuit with the SEC in August 2025, which affirmed XRP's status as a non-security in secondary transactions, the Beincrypto analysis noted. Institutional inflows of $210 million in September 2025 further highlight growing adoption, particularly in cross-border payment use cases.

Retail sentiment is also shifting. Over 439 million XRP-worth $1.2 billion-were withdrawn from exchanges in October, signaling a shift from speculative trading to long-term holding, the Beincrypto analysis added. Analyst Oscar Ramos notes that this accumulation, combined with ETF-driven demand, could propel XRP toward $4–$7 by year-end, assuming favorable regulatory outcomes, in an interview with Coin-Views. However, risks remain, including potential delays in ETF approvals or global macroeconomic headwinds, which Cointelegraph has warned could derail momentum.

The Path Forward: Balancing Risks and Opportunities

While XRP's technical and sentiment fundamentals appear bullish, investors must remain cautious. A breakdown below $2.75 could reignite bearish momentum, particularly if the SEC delays ETF rulings. Conversely, a breakout above $3.02-coupled with ETF approvals-could trigger a 23% rally to $3.66. The interplay between leveraged positions, institutional inflows, and regulatory developments will likely dictate XRP's trajectory in the coming weeks.

For now, the market is in a critical consolidation phase. As one analyst aptly put it, "The calm before the storm isn't weakness-it's preparation," a sentiment highlighted in Coin-Views. With October historically averaging a -4.5% return for XRP, 2025 may defy the trend if institutional and regulatory tailwinds align.