The XRP price has been in a freefall in the past few months, a trend that has accelerated this week. Ripple dropped for three consecutive days, reaching a low of $1.7750, down by over 40% from its highest point this year. This crash has happened even as the token has had some good news.
XRP Price Has Crashed Despite Major Good News
The ongoing XRP price crash is bizarre as it happened at a time when the network is thriving on key metrics. The most crucial point is that XRP ETFs are seeing robust investor demand.
These funds have seen inflows on all days since their launch in April and have now crossed the critical $1 billion milestone. Their growth has outpaced that of Ethereum. As such, if the trend continues, the funds are likely to reach over $10 billion in inflows within the first 12 months.
The other good news is that the SEC vs Ripple case ended earlier this year. This was notable because the case was a major thorn in XRP’s side for many years.
Meanwhile, the XRP price has dropped even after Ripple Labs received a banking license last week. By becoming a bank, the company will now have cheaper financing and the ability to offer more banking services.
Ripple Labs received funding at a $40 billion valuation, while the RLUSD stablecoin has continued growing. It now has over $1 billion in assets, making it one of the biggest stablecoins in the crypto industry.
Why the Ripple Price Has Plunged
There are at least three main reasons why the XRP price has crashed despite the ongoing good news. First, the decline is due to the broader crypto market crash, which has affected Bitcoin and other altcoins. Bitcoin has moved from $126,200 to $85,000 today, while the industry’s market capitalization has fallen to $2.8 trillion.
Second, the decline is due to ongoing fear in the crypto market, as liquidations have jumped over the past few months. Data shows that liquidations rose to over $20 billion on a single day in October. As a result, investors have largely avoided the market since then.
Finally, technicals have contributed to the ongoing XRP price crash. As the chart below shows, the token has continued forming a series of lower lows since July this year. It has remained below all moving averages, while oscillators continue to fall.
Therefore, traders have remained elusive as these technicals point to more declines over time. On the positive side, the token has formed an inverse head-and-shoulders and a double-bottom pattern. These patterns suggest a rebound may occur soon.
However, as a caution, the XRP price will likely remain in the red as long as it remains below the 50-day and 100-day moving averages and the slanted neckline of the inverse H&S pattern.
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