- XRP’s Crash and Recovery: XRP experienced a sudden 31% price drop, falling from $2.57 to $1.76 within three hours, before rebounding to $2.48 amid suspicions of market manipulation by liquidity removal.
- Market Dynamics and Algorithmic Trading: Experts suggest market makers may have strategically withdrawn buy-side liquidity, leading to coordinated price drops across multiple assets like XRP, Bitcoin, and HBAR, likely driven by algorithmic trading activity.
- Current Sentiment and Outlook: XRP is recovering above $2.48 but faces resistance between $2.50–$2.70. Analysts believe its trajectory will depend on broader market conditions and the resolution of global trade uncertainties.
The crypto market’s latest downturn was anything but ordinary, with experts hinting at behind-the-scenes dynamics influencing XRP’s sudden price crash. This came amidst fears of escalating trade tensions after former President Donald Trump announced new tariffs on China, Mexico, and Canada. The ripple effect (pun intended) sent shockwaves across markets, with Bitcoin dropping below $91,000 and XRP plunging under $3 for the first time since mid-January.
A 31% XRP Crash in Hours Sparks Manipulation Concerns
In one of the most dramatic developments of the sell-off, XRP tumbled from $2.57 to $1.76 within just three hours on February 3, a jaw-dropping 31% collapse. However, it wasn’t long before XRP rebounded above $2, fueling suspicions of market manipulation.
Market expert Dom, known for his insights into order book mechanics, weighed in on the situation. According to him, the price drop didn’t follow normal market behavior. He believes major players—market makers—collectively removed buy-side liquidity, allowing XRP and other altcoins to freefall before strategic bids were placed at lower prices.
Market Makers and Order Book Dynamics
Dom elaborated on the anomaly, explaining that in the final moments of the crash, order books became unnaturally thin. It was as though buyers had temporarily vanished, allowing prices to spiral downward unchecked. However, as soon as bids were filled at rock-bottom prices, XRP quickly rebounded—conveniently benefitting those who placed those bids.
Interestingly, Dom clarified that while this wasn’t outright manipulation, it also wasn’t “natural market behavior.”
Strange Patterns Across Multiple Assets
Vincent Van Code, another analyst, pointed out that XRP wasn’t the only asset exhibiting bizarre price activity. He noticed eerily similar trading patterns across Bitcoin, HBAR, and other tokens on multiple exchanges, with price fluctuations mirroring each other almost perfectly.
Van Code shared 30-minute charts showing identical spikes and drops, suggesting coordinated algorithmic trading might be at play. He questioned how such synchronicity could occur organically across so many different assets.
Dom agreed that algorithmic trading often causes synchronized behavior, particularly in low-liquidity markets. He emphasized that algorithmic market makers frequently operate in tandem across various exchanges, magnifying volatility during sharp moves.
Current XRP Recovery and Market Sentiment
As of this writing, XRP has bounced back to $2.48, holding firm above key support levels despite renewed bearish pressure. Whether the token can sustain this recovery depends on broader market conditions, including the resolution of ongoing trade concerns.
Market watchers are now eyeing the $2.50–$2.70 resistance zone as a potential pivot point. A strong push above these levels could help XRP regain its previous momentum. However, continued uncertainty may leave the market vulnerable to further fluctuations.
Final Thoughts and Disclaimer
This analysis highlights how subtle market dynamics and algorithmic trading can contribute to extreme volatility in the crypto market. While some experts argue that these movements aren’t outright manipulation, they also admit that coordinated activities can strongly influence price action.
