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Why Did Ripple’s (XRP) Price Crash by 18% in 36 Hours?
Ripple’s XRP has had a drastic price drop of around 18% in just 36 hours, falling from over $2.7 yesterday to under $2.25 minutes ago. The sudden and severe decline raises questions about the potential factors contributing to this crash.
Prior to this plunge, XRP was performing remarkably well, reaching almost $2.6 on Monday evening after Ripple announced its long-anticipated stablecoin would be launched the following day – December 17. The positivity continued as XRP skyrocketed to a multi-week peak of $2.73 (on Bitstamp and other exchanges) on the launch date. However, this upward momentum did not sustain itself, with the asset instead commencing a retracement that dropped it to $2.5 earlier today before plummeting south violently to a 6-day low of $2.23 in response to the Federal Reserve’s latest rate cut.
It is difficult to disregard the correlation between XRP’s price decline and the overall cryptocurrency market drop, as this crash could be attributed to said event. Nevertheless, Ripple’s retracement is more severe than most, with a 24-hour decline of approximately 11% and a 36-hour decline of about 15%. This precipitous fall has led to speculation that XRP might be experiencing a “sell-the-news” phenomenon.
The notion of a sell-the-news event arises from the fact that XRP jumped ahead of the RLUSD launch, only for its price to tumble following the stablecoin’s actual release. This type of scenario is familiar in the cryptocurrency market, where a strong reaction to positive news can lead to traders selling their holdings once the expected outcome occurs.
Additionally, there is another potential factor at play – Ripple’s ongoing legal tussle with the US Securities and Exchange Commission (SEC). Although there will be a significant shift in leadership at the agency in the coming months, experts indicate that Ripple may be held back by other projects such as Litecoin and Hedera, both of which could precede XRP in receiving approval for an ETF.
In this light, it is difficult to ignore the possibility that investors are growing increasingly cautious about investing in XRP due to its ongoing legal issues.
Source: cryptopotato.com
