XRP is weathering a tumultuous period as its value slips below critical thresholds—$0.60, $0.59, $0.57, and $0.55—since the beginning of the year. Despite a promising start on New Year’s Day, XRP has encountered a 16% decline within just 24 days, marking its most significant downturn since August 2023 when it saw a substantial 26.75% drop.
The primary cause behind XRP’s recent dip is the broader crypto market’s downward spiral, with Bitcoin playing a central role. Over the past week, the combined value of all cryptocurrencies plummeted by $130 billion, leading to an 11% decrease in XRP’s valuation.
Bitcoin’s surge to $48,969 briefly lifted XRP to $0.6240, only to be followed by a swift reversal as major Bitcoin stakeholders and long-term holders divested substantial holdings. The Grayscale Bitcoin Trust (GBTC), known for its steep fees, further intensified the sell-off, prompting influential investors to shift away from GBTC shares.
This chain reaction resulted in an 8.05% decline in Bitcoin prices over the last week, subsequently affecting XRP and other cryptocurrencies.
As discussions around cryptocurrency exchange-traded funds (ETFs) gain momentum, the potential introduction of a spot XRP ETF adds an intriguing dimension to the ongoing narrative. Advocates emphasize XRP’s robust legal standing, sparking speculation about the prospect of a spot XRP ETF entering the market. Despite market enthusiasm for such a product, no asset manager has taken the initiative to file for it yet.
Last November, a counterfeit BlackRock iShares XRP ETF briefly appeared on the official Delaware ICIS platform, underscoring the market’s desire for an XRP ETF. However, the industry awaits a legitimate player to make the first move.
The recent decline in both Bitcoin and XRP prices can be traced back to the actions of whales—individuals holding substantial volumes of cryptocurrency. Notably, a significant transfer of 29.1 million XRP to Bitstamp on Monday, initiated by Ripple, has reverberated through the market.
Santiment’s data reinforces this trend, revealing an increase in addresses holding 10-100 million XRP, while those with 100 million to 10 billion XRP have notably diminished this month. The significant sell-offs by major holders are instrumental in shaping the current dynamics of the cryptocurrency market.
The decline in XRP’s fortunes stems from both market sentiment and developmental activity on the XRP Ledger (XRPL). The ebb and flow of these factors are closely intertwined, with higher development activity and an increased number of developers typically favoring a bullish market sentiment.
Presently, XRP boasts 45 full-time developers, securing its position as the 49th mainstream blockchain. As the cryptocurrency world navigates these challenging times, the fate of XRP hinges on the delicate balance between market sentiment and ongoing development efforts on the XRPL.
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