XRP Plummets Below $2 Amid Crypto Market Sell-Off and Trump Tariff Shock

XRP's latest price was $2.40, down 0.212% in the last 24 hours. In recent weeks, the token has experienced a sharp correction, dropping below $2 for the second time in 2025. This decline was part of a broader sell-off in the cryptocurrency market, which saw nearly $20 billion in value erased within 24 hours. The sudden drop in XRP’s price triggered over $700 million in liquidations across derivatives markets, with long positions suffering the most. This event highlighted the fragility of leveraged positions during periods of high volatility and underscored the risks associated with speculative trading.

Open interest for XRP derivatives also saw a significant decline, with the total value of outstanding positions falling from over $8 billion to approximately $5 billion. This indicates a widespread deleveraging among traders, as forced liquidations swept across major platforms. Despite the sell-off, trading activity in XRP futures and options surged to a multi-month high, reaching $23 billion. The increased volume suggests traders are either hedging their exposure or seeking to benefit from short-term price swings in the aftermath of the downturn.

Analysts have linked the broader sell-off to a mix of macroeconomic and internal market factors. A key trigger was the announcement of a 100% tariff on Chinese goods by U.S. President Donald Trump, which caused widespread risk aversion across global markets. Cryptocurrencies, often viewed as high-risk assets, were particularly affected by this macroeconomic shock. For XRP, the decline also reflects a slowdown in the bullish momentum that had been building since late 2024. According to on-chain data from Glassnode, investors who had accumulated XRP at prices below $1 began taking profits as the token climbed above $2 and $3, which reduced upward pressure on the asset.

Two major profit-taking waves in December 2024 and July 2025 coincided with price peaks, delivering over 300% gains for early holders. With these profits realized and broader market sentiment shifting toward caution, XRP appears to be entering a consolidation phase. Market observers are now watching for new catalysts that could reignite investor confidence. Potential triggers include the anticipated approval of spot ETFs for cryptocurrencies and continued growth in Ripple’s blockchain infrastructure and XRP Ledger adoption.

A significant recent development for XRP was a sharp derivatives market reset in late October 2025. Data from CryptoQuant shows that open interest for XRP dropped by 40% within four days, falling from nearly $3 billion to $1.8 billion. This massive contraction reflects widespread deleveraging among traders, particularly on major exchanges. The sell-off was preceded by a violent price collapse on October 10, when XRP broke below the critical $2.75 support level, triggering stop-loss orders and further liquidations. Prices briefly fell to $1.07 before recovering to around $2.37 by the end of the day.

This sharp correction is viewed by analysts as a necessary step to eliminate excessive speculative leverage in the market. However, the damage to XRP’s technical structure is evident, with the former support level of $2.75 now acting as resistance. Bulls will need to reclaim this level to reestablish upward momentum. The current focus for investors is whether XRP can stabilize near the $2.30 zone, with a successful rebound potentially setting the stage for a renewed upward trend in the fourth quarter of 2025.

Ripple, the company behind XRP, continues to position the token as a utility-driven asset. Through its On-Demand Liquidity (ODL) service, XRP is used as a bridge currency to facilitate cross-border payments between fiat pairs. This model suggests that as more institutions adopt Ripple’s technology, transactional demand for XRP will grow organically, supporting its long-term value. Ripple’s vision is based on the principle that utility and demand are closely linked, and that increased adoption will translate into sustained token value.

Ripple also manages a unique supply mechanism for XRP. Approximately half of the total supply—about 50 billion tokens—is held in a cryptographic escrow system. Each month, a portion of these tokens is released, with any unused tokens returned to escrow. This controlled release is designed to prevent sudden market flooding and help stabilize price volatility. However, it also means that Ripple’s distribution rate directly affects how effectively increased demand can translate into price appreciation.

Regulatory clarity has also played a key role in shaping XRP’s recent trajectory. In August 2025, Ripple’s long-running legal battle with the U.S. Securities and Exchange Commission (SEC) concluded with a ruling that classified XRP as a non-security. This outcome removed a major legal uncertainty and encouraged greater institutional interest in the token. With regulatory hurdles now cleared, Ripple is in a stronger position to expand its network of partners and scale its ODL service. This expansion is particularly notable in regions such as the Middle East, Latin America, and Southeast Asia, where Ripple’s technology is gaining traction among banks and remittance firms.

Despite recent volatility, Ripple remains confident in the long-term potential of XRP. The company’s business model is built on the premise that utility and demand are inseparable from market value. As Ripple continues to focus on infrastructure and partnerships, the underlying message is clear: adoption must translate into sustained token demand for XRP to achieve lasting price momentum. While short-term price fluctuations may persist, the broader narrative for XRP remains centered on its role as a utility-driven asset that supports global financial transactions.

The recent XRP market developments reflect a complex interplay of macroeconomic pressures, internal market dynamics, and regulatory progress. While the token has faced significant short-term challenges, the underlying infrastructure and strategic vision for XRP remain intact. The focus for investors now is whether the market can stabilize and whether new catalysts, such as institutional adoption and regulatory advancements, will provide the necessary momentum for XRP to regain its upward trajectory.