The Reasons Behind the Current XRP Price Crash
XRP remains in familiar territory, trading in the red zone as the token experiences further losses. It is worth noting that XRP is the subject of ongoing speculation, as it has failed to rally and instead consolidates below the $1 mark. The ongoing case between Ripple and the Securities Exchange Commission (SEC) has contributed to the token’s downturn. Additionally, the overall market sentiment, which has impacted assets like Bitcoin, has also affected XRP. To avoid further declines, XRP needs a significant shift in its price action as bears continue to be in control. Currently, XRP has strong support in the $0.45 to $0.46 zone, offering hope for a rally towards the crucial $0.50 mark. However, in the short term, XRP continues to show a sharp decline.
Insights into why XRP is crashing can be obtained from on-chain data. Santiment, a crypto analysis platform, shared data on June 25 that provides some clarity on the situation. The data indicates that investors have realized losses on their token holdings over the past ten days, coinciding with XRP losing the $0.50 support. This suggests market capitulation, with traders selling their tokens at a loss and anticipating further price declines. Specifically, the XRP Network Realized Profit/Loss (NPL) data shows negative spikes in the ten-day timeframe, with losses exceeding $30 million. Additionally, the supply of XRP on exchanges has decreased during this period, contributing to bearish sentiments.
Furthermore, the planned token unlocks are causing concern among investors, as they could lead to further downside. On July 1, XRP plans to unlock 1 billion tokens worth $470 million as part of Ripple’s monthly sell-offs. This could potentially have a negative impact on the XRP price in the coming weeks.
In addition to these factors, XRP’s correction aligns with ongoing regulatory developments. SEC Chair Gary Gensler’s allegations that the crypto sector has harmed the public have rattled the industry. Ripple CEO Brad Garlinghouse criticized Gensler’s statement, calling it “absolute nonsense.”
Currently, XRP is trading at $0.46 with daily losses of almost 0.5%. On the weekly chart, the token has declined by over 6%. The lifeline for XRP depends on breaking through the $0.50 resistance zone, which would inspire investor confidence in the asset.