XRP Rally Started 1 Year Ago – And Traders Lost $700 Million In a Flash

Core Insights - XRP has experienced a significant price drop, reaching its lowest level in six months, with a decline of over 13% to $1.53 before a slight recovery to $2.44, marking the second instance in 2025 where it fell below the $2 threshold [1][2] - The sudden price decline led to over $700 million in liquidations, primarily affecting long positions, as traders were caught off guard by the downturn [2] - Despite the price drop, XRP's derivatives trading volume surged to over $23 billion, indicating increased activity as traders sought to hedge or capitalize on volatility [3] Market Dynamics - The market slump was exacerbated by macroeconomic tensions, particularly following President Trump's announcement of a 100% tariff on Chinese goods, which affected risk assets including cryptocurrencies [4] - Internal market dynamics also contributed to XRP's decline, with data showing that bullish momentum has waned since late 2024 as early investors took profits during price rallies [5] - Profit-taking waves in December 2024 and July 2025 coincided with price peaks, yielding over 300% gains for early holders, leading to a consolidation phase for XRP [6] Future Outlook - Analysts suggest that new catalysts, such as the potential approval of spot ETFs, could restore investor confidence in XRP [6] - Continued growth and adoption of Ripple's blockchain technology and XRP Ledger may also support the token's future ascent [7]