XRP News Today: XRP Surges to $3.65 All-Time High Before 18% Drop Traps Short-Sellers

XRP traders experienced a dramatic market reversal in July 2025, as the cryptocurrency surged to an all-time high of $3.65 before plunging to $2.99 and rapidly rebounding to $3.19. The sharp decline created a textbook bear trap, luring short-sellers who anticipated a deeper correction. Armando Pantoja, a crypto investor and Benzinga advisory board member, described it as “the largest XRP bear trap in history,” citing the sudden invalidation of bearish expectations as buyers reclaimed support at $3 [1]. The move followed a sustained rally through key resistance levels, which had fueled optimism among investors who had waited nearly seven years for XRP to reach this milestone. However, the swift drop to $2.99 breached critical psychological levels, triggering sell-offs that were quickly undone by a rebound above $3.20 [1].

The bear trap mechanism unfolded as XRP’s price action exploited common trading psychology. A double bottom pattern—where the asset rebounded from support twice—typically signals a bullish reversal. In this case, the pattern was manipulated to create an illusion of sustained momentum, drawing buyers into positions that were rapidly invalidated by the collapse [3]. The descending wedge breakout, another bullish technical indicator, further masked underlying weaknesses in XRP’s fundamentals. Whale activity near the $3.84 all-time high added to the deception, with large holders accumulating shares to create a false narrative of strength [6]. Analysts noted that the absence of institutional support or fundamental catalysts left the rally vulnerable to a sharp correction.

Retail traders faced compounded risks as the market shifted. The rapid reversal erased gains for long positions while short-sellers were forced to cover at a loss, exacerbating volatility. On-chain metrics, such as gamma exposure, highlighted a negative environment for options traders, with margin calls intensifying downward pressure during the collapse [5]. The event underscored the perils of relying solely on technical analysis in a market prone to manipulation. The $3 level, once a contested battleground, now serves as a confirmed support line, reinforcing its technical significance after the failed breakdown [1].

Moving forward, XRP’s ability to maintain its position above $3 will be critical. The recovery has reestablished the $3.19 range as a key threshold, with analysts monitoring for signs of broader trend continuation. While the asset remains above its early July range, the bear trap has heightened caution among traders. The episode has been cited as a cautionary tale about the risks of FOMO-driven speculation and the need for diversified risk management strategies [1].

Sources:

[1] XRP Just Witnessed the Largest Bear Trap in History. Here’s What Happened, Times, 2025-07-18

[3] GeniZenith XRP Update: Quiet Before the Storm?, Instagram, URL not provided

[5] Target level for QQQ gamma exposure, Facebook, URL not provided

[6] Real-Time Crypto News, Latest Cryptocurrency Updates, CoinGlass, 2025-07-25