The recent price drop of XRP has ignited a debate among market analysts about whether the fall to $1.76 was a natural market response or a more orchestrated event.
In a time span of three hours on February 3, 2025, XRP witnessed a swift drop from $2.57 to $1.76, an astonishing 31% decline. However, the rapid rebound above $2 that followed soon after the drop raised some alarms.
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This price fluctuation has been a focal point of speculation, with some arguing that external influences, as opposed to natural selling pressure, were at play.
“The move yesterday was manipulated”
Let me outline my reasoning and why I felt somewhat assured in predicting a low within three minutes last night (read until the end)
Using $XRP as an example
I believe yesterday was a coordinated effort by market makers to allow altcoins to drop into… https://t.co/WOW4EB3QAE pic.twitter.com/y6ngsHrxl8
— Dom (@traderview2) February 3, 2025
Market Analysts Raise Concerns About Possible Manipulation
One of the first to notice irregularities in XRP’s price actions was crypto expert Dom. He observed that the decline in price followed a peculiar trend where liquidity appeared to vanish during the final stages of the drop.
He suspects that market participants intentionally suppressed buy-side liquidity, enabling the price to plummet and subsequently strategically launching buy orders at lower levels to capitalize on the rebound.
“I don’t want to delve into conspiracy theories but if you think that move was ‘natural,’ reconsider. It simply seems to me like a joint effort to crash altcoins WHILE filling their own bids,” Dom declared on X.
Additionally noteworthy was the observation that the drop in XRP did not appear to be isolated. Market analyst Vincent Van Code pointed out that during the same timeframe, Bitcoin, HBAR, and various other cryptocurrencies exhibited similar price fluctuations. This raised questions about coordinated market actions or algorithmic trading.
The Complexities Are Further Intensified By Synchronized Market Movements
Unless external factors are actively influencing price dynamics, the statistical probability of multiple cryptocurrencies encountering the same sharp drop and recovery simultaneously is minimal.
While algorithmic trading can sometimes create correlations among assets, experts contend that the precision of these movements indicates a greater level of coordination.
Dom highlighted that although panic selling and sudden liquidations could contribute to these declines, the manner and speed of the event suggest that natural market forces alone are unlikely to be the sole cause.
Dom stated that it is possible some market makers are manipulating XRP to accumulate it at discounted prices, especially if they are indeed withdrawing liquidity to drive down prices.
“Regardless of whether that was the low or not, these participants stand to gain significantly!,” the analyst remarked.
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The Implications For XRP Investors
This occurrence serves as a reminder for XRP holders about the volatility present in cryptocurrency markets. Large holders or institutional investors may exploit their influence during sudden price drops and recoveries. Investors ought to exercise caution when navigating unpredictable markets and consider utilizing tools such as stop-loss orders to mitigate their risks.
XRP has since surpassed the $2 mark again, but whether this was a calculated maneuver or a typical market correction remains a subject of discussion.
Featured image from Gemini Imagen, chart from TradingView