On December 18, XRP, that is the cryptocurrency of Ripple Labs, noted a major decline in its value, which conquered figures nearing 5% after a very negative trend swept across the cryptocurrency market. In fact, this is also true with the launch of Ripple’s new stablecoin RLUSD, which has already amassed a market capitalization of $53 million. Initially, this created an upward effect on the price of XRP for a while before profit-taking, and the general market forces caused it to reverse.
XRP Price Declines Amid RLUSD Launch and Market Liquidations
There has been a marked disruption in the overall cryptocurrency market as the traders point expectantly towards the announcement of the Federal Reserve on the interest rate. After a recent high of about $2.73, XRP fell sharply, rubbing off much of its earlier gains upon hitting the weekend.
The selloff triggered massive liquidations across exchanges, with more than $15 million worth of bullish positions closed because the margin was insufficient to support positions. Furthermore, more than $4.6 million in short positions were liquidated, according to CoinGlass data.
RLUSD has attracted over $53 million in assets within a very short period. The 24-hour trading volume of the stablecoin has gone above $550,000, indicating that there was a strong demand at first. RLUSD will have quite a challenge in competing with other stablecoins. Tether is a giant in this area, with over 60% of the market, while USD Coin and some others, such as Ethena USDe and Dai, are also quite established competitors.
Economic Context of XRP
XRP’s lesser concern for investors is a result of the uncertainty in which investors are holding on to the Federal Reserve’s central bank call on interest rates. Fiscal authorities are anticipated to take a hawkish cut and reduce rates by 0.25%, although to be “silent” at the subsequent reassessment slated for 2025. Such uncertainty definitely leads the investor to rethink their position on riskier assets, such as cryptocurrencies.
Concerns about the inflationary policies of President-elect Donald Trump caused more stirring among the markets. With proposals concerning deportation and tariffs bring the possibility of creating economic instability, most investors will tend to be extra cautious. Thus, traders have chosen to book profits from positions in XRP and other cryptocurrencies before this important announcement.
Technical Analysis of XRP
Technically, XRP is revealing signs of bearish patterns that might indicate continued drops. The daily chart shows the formation of a shooting star candle pattern on December 17 that has a small body and a long upper shadow, signalling a tendency toward a bearish reversal in the momentum.
Besides, with a double-top formation at $2.89, XRP appears to be on its way to a decline in value. This specific grouping consists of two peaks situated at a very close price mark and usually follows a downward slope when it is confirmed with a break underneath the neckline support line of around $1.8958. In case XRP manages not to keep it above this most critical support, it might as well keep continuing to go down as part of an aggregate mean reversion.
Future Outlook of XRP
Nonetheless, several factors can trigger the XRP price upwards as bearish sentiments surround it. Speculation regarding regulatory development between Ripple Labs and the Securities and Exchange Commission (SEC) happens to be the most important.
The most optimistic expectations regard the SEC and its possibly dropping the appeal against Ripple after the last favorable court decisions for the company. Keep following Turkishnyradio to keep an eye on more crypto-related updates.
FAQs
What caused XRP’s recent price drop?
The recent XRP price decline is a result of profit bookings after the Ripple launch of RLUSD stablecoin and, more importantly, where the general market is reacting to uncertainty in anticipation of the Federal Reserve’s interest rate decision.
What is RLUSD?
RLUSD is a new stablecoin launched by Ripple, and it has already gained several billion worth of assets very quickly, even though there are other big players like Tether.
How does XRP compare to other stablecoins?
The XRP is already in a crowded market, along with Tether and USD Coin, fighting for its little place in the crowded market. It plans to show the industry a distinct angle with new features like RLUSD.
