XRP, the popular cryptocurrency, has been on a downward trend in recent weeks, and this trend continued on January 23rd. The price of XRP dropped by over 4% to $0.50, and there are a few factors contributing to this decline.
From a technical standpoint, XRP’s decline is part of a larger downtrend that typically occurs when the price tests a descending trendline resistance that has been in place for several months. The most recent retest of this trendline occurred on December 28th, and since then, the price has fallen by about 25%.
Currently, XRP is approaching a crucial technical threshold, which is a multi-month ascending trendline support. In the past, this support level has often marked the beginning of more significant recoveries. However, at the moment, XRP shows bearish momentum, with the price trading below key moving averages and the RSI suggesting potentially oversold conditions. This could attract buyers looking for a good deal at the current price levels.
In addition to technical factors, XRP’s price decline is also influenced by the recent buzz around the potential launch of a spot XRP exchange-traded fund (ETF) in the United States. Many in the market were hopeful that BlackRock, the world’s largest asset manager, would introduce such an ETF. However, these expectations were dashed when BlackRock clarified on January 18th that they had no plans to launch an XRP investment product. This news led to a drop of over 13% in XRP’s price.
Furthermore, investor sentiment has been affected by Ripple, the company behind XRP, being involved in ongoing legal disputes with the U.S. Securities and Exchange Commission (SEC). The SEC’s demand for Ripple to produce financial statements and the lawsuit scheduled for April 2024 have created regulatory uncertainty around XRP, which has likely dampened investor enthusiasm and contributed to the recent sell-off.
Interestingly, the decline in XRP’s price coincides with a decrease in the supply held by its largest investors. In January, there was a notable reduction in the XRP supply held by addresses with balances ranging from 100 million to 1 billion tokens, while there was an increase in the supply held by investors with balances between 10 million and 100 million tokens. This suggests that the larger investors within the 100-million-to-1-billion token balance group have been actively selling or redistributing their XRP holdings.
It is important to note that this article does not provide investment advice or recommendations. As with any investment or trading decision, there are risks involved, and readers should conduct their own research before making any decisions.