## 1. What happened on October 10 and why is the market not rising
On October 10, 2025, the crypto market experienced the largest liquidation in its recent history: nearly 400 billion dollars in value vanished, with over 19 billion liquidated in derivatives and around two million accounts forced to close, many of which were still in profit just minutes before. The visible trigger was an explosive combination: tariff announcements from Donald Trump that rekindled fears of a trade war with China and an over-leveraged market that lacked sufficient liquidity to absorb the wave of sales.[2][4][5][6]
This environment was compounded by a specific but lethal failure in the infrastructure: the stablecoin $USDe$USDE de Ethena deviated to 0.65 dollars on Binance while it remained around 1 dollar on other exchanges, triggering auto-deleveraging (ADL) mechanisms that liquidated winning positions in cascade. The result was a “flash crash” that not only hit altcoins, with declines of 40-90%, but also left major market makers with significant holes in their balances and forced to drastically reduce risk and liquidity provision. [4][5][11][12][13][14]
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## 2. MSCI, MicroStrategy, and the forced sale that the market is discounting
The explanation of why the market is not managing to rebound strongly appears days later: on October 10, MSCI opened a consultation to reclassify “Digital Asset Treasury Companies” (DATs), that is, listed companies whose core activity is to hold large reserves of crypto on their balance sheets. The key question is whether these companies should be treated as “operating companies” or as vehicles similar to funds; in the latter case, they would be excluded from the major equity indices and, by extension, from the passive investment mandates that require them to be held in portfolio. [15][16][17][18][19]
MicroStrategy is the most visible case: it holds over 600,000 Bitcoin, a large part of its value depends on that asset, and around 9 billion of its market capitalization is in the hands of passive vehicles that replicate indices like Nasdaq 100, MSCI USA, and MSCI World. JPMorgan estimates that an exclusion by MSCI could force automatic exits of about 2.8 billion dollars just from that index provider, and up to 11.6 billion if other major benchmarks follow the same criterion. It is not surprising that the price of MicroStrategy has fallen much more than that of Bitcoin in recent months and has become a leading indicator of crypto stress. [18][19][20][21][22]
Michael Saylor has publicly defended that Strategy (MicroStrategy) is not a fund or a trust, but an operating company with a software business valued at about 500 million dollars and a treasury strategy that uses Bitcoin as productive capital. By 2025, the company has issued several series of debt and preferred shares linked to Bitcoin worth over 7.7 billion in notional value and continues to buy BTC even in the midst of a decline, indicating long-term conviction about the asset beyond the risk of index exclusion. However, the market is already discounting part of the adverse scenario: a potential negative decision from MSCI on January 15, 2026, would imply additional forced sales, downward pressure on Bitcoin, and prolongation of deleveraging. [19][22][23][24][18]
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## 3. A “semi-blind” FED and the effect on risk appetite
In parallel, the macro environment is also not helping. The prolonged U.S. government shutdown has delayed the publication of key statistics —such as industrial production and capacity utilization— and leaves the Federal Reserve without a significant portion of the data it normally uses to calibrate monetary policy ahead of the December meeting. The latest minutes show a divided committee, with one part leaning towards keeping rates stable until more visibility is obtained and another open to a cut if the slowdown in employment and inflation justifies it. [25][26][27][28][29][30]
In this context, Governor Stephen Miran has indicated that the FED should be “forecast-dependent and not just data-dependent,” suggesting he would support a 25-basis point cut if his vote were decisive, although the complete inflation data for November will not be available before the decision. This mix of lack of data, mixed messages, and a possible dovish turn increases the volatility of rates and the dollar and reinforces risk aversion in leveraged and high-beta assets like cryptocurrencies, which have already lost over a trillion dollars in capitalization since this year's highs. [1][5][8][31][32]
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## 4. Where does XRP fit in this new market regime
Within this environment of deleveraging, risk of forced sales by MSCI, and a FED with limited visibility, XRP stands out due to an unusual combination of short-term pressure and bullish structural build-up. On the negative side, the token has suffered significant declines from its recent highs and is trading in a key technical zone, with relevant supports in the 2-2.15 dollar area and a trend structure that has weakened after losing intermediate levels. Nevertheless, a good part of the recent selling volume comes from liquidations and profit realizations after a prior rally, rather than from a clear deterioration of its fundamentals. [33][34][35][36][37]
On the constructive side, the on-chain and positioning metrics show significant accumulation by large addresses: various analyses estimate aggregate whale purchases above 500-600 million dollars within a few weeks and a drastic reduction —of up to 80-90% on some exchanges— of the XRP balance available on centralized platforms. In addition, the emergence of new XRP spot ETFs and structured products that have debuted with significant daily volumes suggests growing institutional interest even during the correction phase. If that demand channeled via ETFs is maintained, it could absorb several billion XRP per year and further strain an already reduced floating supply. [38][39][40][41][42][43]
In summary, the article may present the reader with the idea that the October crash was not an isolated episode but the result of the confluence between an over-leveraged market, an infrastructure failure, the regulatory risk implicit in the MSCI review, and a FED with less visibility than usual. Against this backdrop, the thesis of $XRP does not depend so much on the short term as on three vectors: accumulation of large holders, compression of supply on exchanges, and gradual entry of institutional capital via ETFs and structured products. A two-page text can conclude by explaining that the outcome of three milestones —resolution of crypto deleveraging, MSCI's decision on DATs in January, and upcoming FED decisions— will define whether the current extreme fear turns into final capitulation… or into the starting point of the next bullish phase where assets with that combination of narrative and supply structure, like XRP, can lead the rebound. [5][32][39][40][41][2][4][18][25][38]