3 Reasons Why XRP Is Dropping Sharply Today #
The price of XRP has dropped approximately 7% in the past 24 hours to around $2. This decline isn’t isolated but part of a broader downturn across the cryptocurrency market, which is posting losses across the board. However, there’s more to the story. Here are three possible causes behind today’s drop.
In Brief #
- The price of XRP has dropped approximately 7% to around $2 today.
- This decline is part of a broader sell-off in the crypto market; both Bitcoin and Ethereum are also falling significantly.
- XRP’s decline accelerated after the price broke through an important support level at $2.16.
Broad Market Decline is the Main Cause #
The primary reason for the drop is negative sentiment across the entire crypto market. There’s a so-called ‘risk-off’ sentiment, where investors are selling risky assets like cryptocurrencies.
This phenomenon is similar to a bad day on the stock market and leads to declining prices across the board.
That this is a market-wide phenomenon is evident from the prices of other major cryptocurrencies. Bitcoin fell by over 5% and Ethereum lost approximately 6% of its value. XRP’s decline fits within this general trend.
XRP Decline Accelerated by Technical Factor #
For XRP, the decline was reinforced when the price broke through an important technical support level at $2.16. Such a level functions as a kind of ‘floor price,’ where the price found support in the past because buyers became active at that point.
When the price dipped below this threshold, it was a signal for many automated trading systems and traders to sell. This led to a wave of sell orders, causing the decline to accelerate.
Falling Price Despite Positive News for Ripple #
The price decline is occurring despite recent positive news surrounding Ripple, the company behind XRP. The company recently received an extensive payment license in Singapore, and there was positive news about capital inflows into XRP investment products.
Because the decline is happening in light of all this positive XRP news, some analysts believe the ‘sell the news’ effect is also influencing the current price. Traders who speculate on good news sell their positions after the announcement to take profits, which paradoxically can cause a price decline.
Analysts are now looking at the $2 mark as a possible next important support level for the XRP price.