XRP Market Cap Suffers $11 Billion Plunge Amid Price Decline

The cryptocurrency XRP has faced a dramatic market capitalization drop, shedding over $11 billion in a single day. On October 21, XRP’s market cap stood at $179.39 billion, but by October 22, it had fallen to $168.35 billion—a sharp downturn signaling heightened volatility. By 6:00 a.m. EST on October 22, XRP's price had declined 5.5% day-over-day, trading at $2.81. This marks its most significant single-day drop since July, highlighting the turbulent nature of altcoins operating in a Bitcoin-dominated ecosystem.

Unrealized Expectations Behind XRPR ETF Launch Contribute to Decline

The decline can be attributed to unmet investor expectations surrounding the launch of the Letz-Osprey XRP ETF (XRPR). The ETF initially made waves, recording an all-time high of $37.7 million in trading volume on its first day. However, XRP's price exemplified the “Buy the rumor, sell the news” phenomenon, as investors who anticipated the ETF's launch took profits shortly afterward. The subsequent sell-off unleashed market turmoil, exacerbating price drops and liquidations in the derivatives sector.

During the ripple effect of this event, over $1.5 billion worth of cryptocurrency derivatives positions were liquidated, with approximately 90% being long positions. This rapid deleveraging deepened the ongoing price instability and underscored structural weaknesses in the altcoin's market dynamics.

Impact of On-Chain Movements on Investor Sentiment

XRP's on-chain activity added an additional layer of instability to the market. According to Finbold, $800 million worth of XRP moved between anonymous wallets—a highly unusual occurrence during this period. While the motive behind these transactions remains unclear, whether they represent accumulation or distribution, the psychological impact was significant. In a market already struggling with liquidity, such movements undermined confidence and accelerated bearish momentum.

Technically, XRP has struggled to surpass the key $3 price level, solidifying it as a strong resistance zone. This failure to break through has occurred multiple times in recent months, forcing a retreat to lower levels. Indicators such as weakening moving averages, declining MACD signals, and shrinking RSI further reinforce the bearish trend. XRP is currently holding at the critical support level of $2.80, yet analysts warn that a break below this point could result in prices tumbling further to $2.60.

Institutional Adoption Shifts Despite Short-Term Volatility

Amid XRP's bearish performance, the XRPR ETF launch represents a pivotal milestone for institutional cryptocurrency adoption. The debut of an exchange-traded fund tailored to XRP underscores its increasing legitimacy in traditional financial markets. While short-term volatility is proving difficult for the altcoin's valuation, the step towards mainstream acceptance lays the groundwork for potential long-term benefits.

As markets adjust to the heightened liquidity demands brought on by the ETF and the broader ecosystem recalibrates, XRP's performance in the coming weeks will remain in sharp focus. For investors grappling with current market conditions, the ETF launch could serve as a transitional moment that propels the digital asset into a new phase of institutional involvement.