XRP Bloodbath: The Real Reason Behind the Collapse
On December 7, Ripple’s XRP cryptocurrency dropped to $2.03. So, from its highest point this year, it has lost more than 44% of its value. Billions of dollars were lost as a result of this collapse. The result was a drop in value to $122 billion for the market. So, what caused this decline?
XRP Drops as ETFs Surge: What’s Really Driving the Decline?
The price drop of XRP could be attributed to several factors. One reason for this is that investors are still funding exchange-traded funds (ETFs) that were just introduced to the market. According to data provided by SoSoValue, there has never been a day of outflows from the funds. The weekly gain now stands at $230 million after they added $10.2 million in assets on Friday. Consequently, the inflows into these XRP ETFs have now totaled over $897 million.
With more than $363 million, Canary’s XRPC is spearheading the increase. Inflows into Grayscale’s GXRP, Bitwise’s XRP, and Franklin Templeton’s XRPZ have totaled $211 million, $187 million, and $134 million, respectively. The increasing institutional interest in several XRP ETFs is demonstrated by these inflows. Currently, the four ETFs manage assets worth about $861 million. Including the REX-Osprey ETF, these funds currently have assets of more than $972 million. Consequently, the persistently negative attitude in the cryptocurrency market has caused the price of XRP to decline.
Technical Signals Suggest Further Downside for XRP
The current XRP price decline can also be explained by technical analysis since it began when it retested the upper half of the declining trendline. The falling wedge pattern, a typical bullish reversal symbol in technical analysis, had this trendline as its top side. The 50-day and 100-day Exponential Moving Averages have not been reached by the price of XRP. Additionally, it continued to be below the Supertrend indication. This indicates that even with the recent recovery, the market was still in a bear market. As a result, as sellers aim for the crucial support level of $1.8520, the token is probably going to keep declining.
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