The XRP price has crashed this week, erasing billions of dollars in value. Ripple token dropped to $2.76, down by over 25% from its highest level this year. This article examines the reasons behind the XRP crash and speculates that it may be the last dip before a major rally occurs.
Why the XRP Price Crash is Happening
The XRP price is crashing due to the ongoing decline in the crypto market, where most tokens are experiencing a similar drop. Investors have panicked due to recent statements by Fed officials regarding interest rate cuts.
Some top members, including Beth Hammack and Jerome Powell, warned that inflation was still too high. As such, this view tempered the view that the bank would deliver more cuts in the coming months.
The XRP price has also plummeted as crypto exchanges have increased their liquidations this week. Ripple positions worth over $93 million were liquidated on Monday, followed by another $20 million today.
It is common for a cryptocurrency to plunge when the liquidations jump, as this closes long positions. Additionally, traders typically remain on the sidelines when this occurs. Indeed, the futures open interest dropped to $7.4 billion, down from this week’s high of almost $9 billion.
READ MORE: Linea Price Crashes as TVL and DEX Volume Hit ATH, Stablecoins Dive
Why Ripple Price May Rebound
Technical analysis suggests that the ongoing XRP price crash may be the last time to buy it before a major rebound happens.
That’s because the coin is aiming to retest the upper side of the falling wedge pattern. A break-and-retest is a scenario where an asset breaks out, retests its support level, and then resumes its uptrend.
This wedge pattern serves two main purposes. First, it is the triangle section of the bullish pennant pattern. Second, it is the handle part of the cup-and-handle pattern, which also leads to a strong breakout.
The primary catalyst for the XRP price is that October is approaching, when the Securities and Exchange Commission (SEC) is expected to approve spot XRP ETFs from companies like Franklin Templeton and Bitwise.
The recently launched XRPR ETF has attracted over $71 million in assets, a testament to the robust demand among investors.
READ MORE: Lombard Crypto Price Jumps as South Koreans Buy: Is a Crash Coming?
