XRP Leads Crypto Bloodbath: 16% Drop Wipes $1B in Leverage

Liquidity Vanished in Minutes

XRP capitulated Thursday, shedding 16% to trade near $1.30 as a market-wide liquidation cascade forced over $1 billion in leveraged positions to unwind. While Bitcoin lost the psychological $70,000 level (-7%), XRP posted the worst performance among major assets, erasing weeks of structural support in a single session.

Data from Coinglass confirms the scale of the damage: long positions accounted for the vast majority of the $1 billion wipeout. As prices slipped, automated liquidations triggered a feedback loop, forcing traders to sell into a vacuum of liquidity. The $1.30 mark now stands as the last line of defense before a potential retest of the $1.00 psychological floor.

The Institutional Divergence

Despite the price collapse, institutional signals flash a rare divergence. While retail traders panic-sold, XRP spot ETFs and related institutional products recorded net inflows this week. This suggests professional capital is using the liquidity crunch to accumulate, effectively buying the “extreme fear” currently gripping the market.

The speed of the decline has caught many off guard… Instead, it appears institutional money moves just as fast – or faster – than retail when sentiment shifts, TechBuzz Analysts

Bitcoin’s slide below $69,332 served as the catalyst, but XRP’s beta to the downside was severe. The disconnect between spot accumulation (ETFs) and derivatives flushing (price) indicates a classic leverage washout rather than a fundamental exit.

Outlook: $1.25 is the Line in the Sand

Traders are now fixated on the $1.25–$1.30 zone. A clean break below this level risks accelerating the sell-off toward pre-2026 lows. Conversely, if the leverage flush is exhausted, the lack of selling pressure could trigger a sharp “V-shape” reflex bounce, fueled by the very same volatility that caused the crash.