Global Crypto Market Downturn Drives XRP Price Below $0.57
XRP Price Plummets Below $0.57 Amidst Global Crypto Market Downtrend
The price of XRP, backed by Ripple, dropped below $0.57 on April 3 as the global crypto market experienced a dip. However, a concerning selling trend among whale investors threatens to worsen the downward trend.
Over the past week, XRP has faced significant price volatility due to ongoing legal battles with regulators. By analyzing on-chain data trends, we can gain insights into the main catalysts for this bearish behavior and how XRP prices may react in the coming days.
On March 25, Ripple CEO Brad Garlinghouse revealed that the US Securities and Exchange Commission (SEC) is seeking to impose a $1.95 billion fine on Ripple. This announcement came after the agency proved some of its claims regarding Ripple’s illegal sale of securities through the direct sale of its XRP Coin to institutional investors.
Following the SEC’s official filing of the $2 billion fine motion on March 29, whale investors in XRP immediately began selling off their holdings. As shown in the Santiment chart above, they have sold over 290 million coins between March 29 and April 3, reducing their balances to a 30-day low of 44.9 billion at the time of writing.
With the current prices, these recently traded 290 million XRP coins are worth approximately $170 million. Such a large influx of coins into the market is likely to exert downward pressure on prices. As expected, the XRP price has fallen by 13% since the whale sell-off began on March 29.
Retail swing traders may be hesitant to go against these deep-pocketed whales, who hold over 44.9 billion XRP. If small-scale retail traders also take on bearish positions, it may be difficult for XRP price to experience a significant rebound in the near future.
In addition, trends observed in the derivatives markets indicate that speculative bull traders have little optimism regarding XRP’s short-term price prospects. Coinglass’ funding rate metric, which tracks the fees paid between long traders and short position holders, has dropped to 0.013%, its lowest level in 10 days. This decline in funding rate suggests a growing negative sentiment among bull traders who were betting on a price increase.
Should bull traders continue to reduce their long positions, it poses a risk of further downward movement in XRP price in the coming days.
Considering the $170 million sell-off by whale investors and the declining funding rates, it is likely that XRP price will experience a major downswing below $0.55 in the near future.
Currently, XRP price has fallen below the 20-day simple moving average and is precariously positioned above the lower-limit Bollinger band indicator at $0.58. If this critical support level gives way, bears could seize the momentum and push for a larger reversal below $0.55, as predicted.
On the other hand, the bulls could regain control if XRP price manages to break above the $0.62 area. However, given the dominant selling preference among whale investors, this outcome seems unlikely at the moment.
For more information, you can refer to our complete guide to Ripple and XRP.
