In this work, we have investigated a phase transition and optical bistability in a cold \(^{85}\)Rb sample excited to the \(nS_{1/2}\) Rydberg state, using absorption spectroscopy while scanning the Rydberg excitation laser for \(43 \le n \le 77\). The system is characterized through its dependence on the Rydberg Rabi frequency and principal quantum number, exhibiting hysteretic behavior indicative of bistability. We further analyze its time evolution, revealing the characteristic dynamics of the transition between stable states. The results are consistent with optical bistability induced by a cold plasma in the presence of Rydberg blockade. This work demonstrates the role of collective many-body interactions in establishing nonlinear optical responses in strongly interacting Rydberg ensembles.