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Why Did Ripple’s (XRP) Price Crash by 18% in 36 Hours?
The price of Ripple’s cryptocurrency, XRP, has crashed by a staggering 18% over the past 36 hours. This dramatic decline follows a massive 50% surge just days prior, leaving investors wondering what could have caused such a drastic turnaround.
To begin with, it’s essential to understand the recent developments surrounding XRP. The company behind the cryptocurrency announced on Monday evening that its long-anticipated stablecoin would be launched the following day. In response, XRP’s price skyrocketed from around $2.35 to almost $2.6 before eventually peaking at a multi-week high of $2.73.
Despite this explosive growth, the asset failed to maintain its momentum, instead plummeting to $2.5 earlier today and then to an astonishing 6-day low of $2.23 following the Fed’s latest rate cut. This sudden and brutal downturn could be attributed solely to market-wide correction, but Ripple’s retracement is more pronounced than most, with a whopping 11% decline over the past 24 hours and a devastating 15% drop over the 36-hour period.
It appears that XRP’s price collapse may fit into the ‘sell-the-news’ category. This phenomenon occurs when an asset’s price increases significantly in anticipation of positive news or developments, only to experience a subsequent sell-off as investors lock in their profits or take advantage of the perceived hype. This could be precisely what occurred with Ripple’s XRP following its stablecoin launch.
Furthermore, experts on the topic have hinted that Ripple might face competition from other projects that could potentially get approved for ETFs before them. Bloomberg’s Eric Balchunas has suggested that Litecoin and Hedera may precede Ripple in achieving this milestone due to Ripple’s ongoing legal disputes with the US Securities and Exchange Commission, despite a leadership change within the agency on the horizon.
It appears that Ripple’s price crash may be attributed to a combination of factors, including market-wide correction and profit-taking following its rapid growth.
Source: cryptopotato.com
