On February 2, 2025, XRP experienced a sharp drop of over 40%, briefly dipping below $2. The collapse was attributed to a lack of buy-side liquidity, which created an empty order book when hundreds of millions of dollars were market-sold. This event led to speculation about potential market manipulation by market makers.
According to Dom (@traderview2), a well-known crypto analyst, the XRP market sell-off resulted from a net market sale of over $300 million. This volume overwhelmed the available liquidity, causing the price to plummet.
He noted that the order book was “air,” meaning no significant buy orders to absorb the selling pressure. This phenomenon created a cascading effect, pushing prices lower until they reached areas with resting buy orders.
The situation bears resemblance to the 2020 Bitcoin flash crash, where BitMEX temporarily shut down trading, preventing BTC from reaching extremely low levels. In XRP’s case, the absence of liquidity in the order book meant there was no such intervention.
$XRP
For all of you wondering how or why this happens
The orderbook was AIR. Market makers pulled any bids there
Since today, -$300 MILLION net market sold into literal empty orderbooks
This is the result.
This is why they say Bitmex shutting down the exchange in 2020… pic.twitter.com/jAKmZANMgn
— Dom (@traderview2) February 3, 2025
The Role of Market Makers
Dom suggested that market makers may have played an active role in accelerating the decline. He argued that the initial phase of the drop was natural, but the tail end appeared to involve deliberate actions by entities that control market liquidity. “I think yesterday was a cohort effort of market makers to simultaneously let altcoins fall into the abyss by pulling buy-side liquidity at once,” he stated.
Market makers provide liquidity by placing buy and sell orders in an order book, ensuring price stability. However, when they withdraw their buy-side orders, the market becomes vulnerable to rapid declines.
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In this case, Dom highlighted that the order book was empty towards the end of the crash, raising suspicions of coordinated action, and mirroring concerns of market manipulation suggested by other experts.
Signs of a Planned Move
One of the key observations Dom made was the sudden appearance of scattered bid orders at $3.07 before XRP crashed. He questioned who placed those bids and why they anticipated such a drastic move. “WHO would think it would drop -42% in a day? Unless they knew they could make it happen…” he remarked.
These bid orders allowed certain traders to enter long positions at significantly lower prices. Following the crash, XRP rebounded, and those who placed these strategic buy orders saw substantial profits.
The community recently speculated on concerns of price suppression , and Dom suggests that the move was not entirely natural but orchestrated to benefit specific market participants.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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