XRP Suffers 37% Flash Crash Amid $1.35 Billion Market Liquidation

XRP suffered a brutal 37% flash crash on Saturday, August 22, plunging roughly $0.60 within minutes. The sharp downturn followed a weekly rally of over 60% that had previously pushed XRP above $1.69, driven by regulatory optimism, institutional inflows, and a broad market short squeeze. The rapid reversal left traders heavily overexposed in leveraged positions.

Millions Liquidated Across the Crypto Market

The swift market decline triggered widespread liquidations as exchanges forcibly closed leveraged positions. Within minutes, approximately $500 million in late long positions were wiped out. Alongside XRP's 37% drop, other major cryptocurrencies experienced sudden losses during the same window: Bitcoin fell 2.5% (-$1,935), Ethereum dropped 5% (-$130), and Solana slid 11.5% (-$11.50).

Data from Coinglass indicated that total crypto market liquidations reached $1.35 billion over a 24-hour period, with the majority of the activity concentrated on Binance. Analyst CW noted that the downturn was driven by the liquidation of high-leverage retail long positions rather than an increase in short selling.

Causes and Recovery

Analysts pointed out that no major macroeconomic catalyst, such as a Federal Reserve announcement or a security breach, sparked the drop. Instead, observers attributed the event to structural factors, including thin weekend liquidity, excessive bullish positioning, and high leverage. While some market participants viewed the simultaneous drop as manipulation, others characterized it as a necessary deleveraging.

Following the initial drop, XRP managed to recover a portion of its lost ground, climbing back to approximately $1.50 in subsequent hours.