The XRP price dropped a hard loss yesterday, which is similar to the entire wider crypto space. It was after the market capitalization of the recently launched stablecoin that the people term as RLUSD attained a quite impressive figure at $53 million.
The space had seen a huge reversal of fortunes for XRP alongside the other assets involved. It first started by jumping on the price with XRP following the launch by Ripple of the RLUSD stablecoin and later started collapsing to the extreme, eventually resulting in a significant level of liquidation within the market. From what has been said, this was due to some macro factors, particularly an event that led to lower federal interest rates. Mass selling erupted across most cryptocurrencies.
XRP Price Down Amid Market Red and RLUSD Launch
XRP declined sharply on Wednesday, falling more than 5% after most of the gains on Tuesday when the RLUSD stablecoin was launched were erased. The cryptocurrency market at large was red as investors remained bearish, waiting for the Federal Reserve to decide on interest rates.
According to CoinGlass data, the price fall of XRP has brought about huge liquidations, surpassing $15.19 million in long positions and $4.6 million in short positions. Liquidations occur when exchanges automatically close positions due to a lack of margin to cover a loss, which leads to forced selling.
RLUSD had a great start but was tough competition
Ripple’s RLUSD stablecoin has attracted phenomenal amounts of assets with $53 million and trading volume, 24-hour high, over $550,000. The market is, however very competitive because Tether is holding more than 60% of the market share, followed by USD Coin, Ethena USDe, USDS, and Dai. The release of RLUSD faces some competition because its market is saturated, and some big players such as Tether and USD Coin will dominate it.
Despite this, RLUSD could be part of a larger play by Ripple to find its place in the evolving stablecoin and DeFi landscape. However, competition will restrict the growth of RLUSD as other stablecoins such as PayPal’s PYUSD and Justin Sun’s USDD have not been able to make significant inroads in the market.
XRP Price Backward: Profit-Taking or Market Anxiety?
XRP’s price retreat could reflect a combination of profit-taking after the RLUSD launch and investor nervousness ahead of the Federal Reserve’s final interest rate decision for the year. Analysts expect a “hawkish cut,” which would involve a reduction in rates by 0.25%, but with signals of a potential pause in 2025. Additionally, concerns about inflationary policies under President-elect Donald Trump, such as tariffs and deportations, are contributing to market uncertainty.
Despite the short-term setback, XRP still has the potential for catalysts in the future. Ripple Labs could decide to file for an Initial Public Offering (IPO), and the new U.S. Securities and Exchange Commission could drop its appeal, thereby paving the way for the approval of a spot Bitcoin Exchange-Traded Fund (ETF), which would be the next big boost for XRP.
XRP Price Patterns Showing Possible Risk
Technical analysis of XRP’s price chart reveals some disturbing patterns. There was a shooting star candle pattern on Tuesday, which could have triggered a bearish reversal. This pattern is generally small-bodied with a long upper shadow and usually indicates downward pressure in the near term for the price.
It also is forming a double top pattern at $2.89, which had two peaks at that level and the neckline at $1.8958. This is a bearish technical pattern as indicated by double tops formation in which the price may break to the lower side once it crosses the neckline level. In this case, XRP is highly significantly above its 50-day moving average.
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Conclusion: XRP’s price retreat is a consequence of multiple factors, including market-wide bearish sentiment, the launch of the RLUSD stablecoin, and concerns about upcoming economic decisions. While XRP faces short-term challenges, including the formation of potentially bearish technical patterns, its future remains uncertain. Ripple’s continued innovation and the broader regulatory landscape could still offer opportunities for recovery and growth. Investors will have to monitor for technical indicators, market sentiment as well as macroeconomic incidents that may impact the trend that XRP prices may gain in the coming weeks.
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