Liquidity Vanishes in $1 Billion Leverage Flush
XRP capitulated in early trading Thursday, leading a market-wide rout with a staggering 16% plunge to intraday lows of $1.36. The selling pressure was not isolated; it signaled a broader structural break as Bitcoin lost the critical $70,000 support level for the first time since November 2024.
The total crypto market capitalization erased over $160 billion in hours, driven by a “demand vacuum” where institutional bidders simply failed to show up.
The Mechanism: Cascading Liquidations
Data from CoinGlass confirms the carnage: over $775 million in leveraged positions were liquidated in the past 24 hours, with long positions accounting for nearly 80% of the wipeout. XRP was the epicenter of this volatility, suffering disproportionate losses compared to the broader CoinDesk 20 Index.
The move exemplified a classic feedback loop. As XRP breached technical support at $1.50, algo-driven liquidations triggered market sells, which drove prices lower, triggering further liquidations. Unlike previous dips in 2025, no aggressive spot buying wall materialized to arrest the fall.
The absence of aggressive institutional dip-buying, particularly from larger asset managers, left XRP vulnerable to sustained downside pressure.
Institutional Context: The “Warsh Effect”
The catalyst extends beyond crypto market structure. The nomination of Kevin Warsh as Federal Reserve Chair has spiked the DXY (U.S. Dollar Index) above 97.5, renewing fears of a hawkish balance sheet reduction. Risk assets are repricing instantly.
Bitcoin ETFs, previously the backstop for such corrections, have turned net sellers. With Bitcoin trading at $69,300, the market is now eyeing the 200-week moving average near $68,000 as the last line of defense before a deeper bearish trend confirmation.
