Ripple (XRP), the fourth-biggest player in he crypto industry, dropped to $2.0340, its lowest level since Nov. 23. It has now plunged by 45% from its highest level this year.
Summary
- XRP price dropped by over 5% on Monday as the crypto market dived.
- The coin also dropped as bull liquidations soared to over $16 million.
- Ripple price also dropped as its technicals remained under pressure.
XRP crash mirrors crypto industry activity
The main reason why the XRP price is crashing is that sentiment in the sector has worsened in the past few days. This waning sentiment explains why Bitcoin (BTC) and most altcoins dropped today.
Data compiled by CoinMarketCap shows that the Crypto Fear and Greed Index remains in the fear zone of 20. In most cases, crypto prices stay on edge when market participants feel fear.
XRP price also dropped as liquidations rose modestly. Data compiled by CoinGlass shows that bullish liquidations rose to $16 million, well above the previous day’s $2.27 million. This liquidation, while high, was much lower than other coins like Bitcoin, Ethereum, and Zcash.
Technicals also explain why the XRP price is crashing. As the chart below shows, the coin has formed a descending channel pattern and has remained below the 50-day and 200-day Exponential Moving Averages. These two averages formed a death cross on Nov. 6, as the 50-day moving average dropped below the 200-day moving average.
Most importantly, the coin has been forming a series of lower lows and lower highs in the past few months, with sellers stepping in and winning whenever it attempted to rebound.
Ripple has some notable fundamental catalysts
On the positive side, the XRP price has numerous bullish fundamentals that may trigger a rebound over time.
The most important one is that it has strong demand from American investors, which has pushed cumulative ETF inflows to over $666 million. These funds now hold XRP tokens worth over $687 million, which is equivalent to 0.52% of the market cap.
XRP also has other catalysts, including the rising activity on the XRP Ledger, primarily through the Ripple USD product. Data compiled by DeFi Llama shows that the amount of stablecoins on the XRP Ledger has risen by over 90% in the last 30 days.
Combined with assets on Ethereum (ETH), RLUSD now has over $1.3 billion in assets. XRP will also benefit from the recent investment in Ripple Labs by Citadel and Fortress Investment. The company received $500 million in cash at a valuation of $40 billion, making it one of the biggest companies in the crypto industry.
