The post Top Reasons Why XRP Price is Dropping? appeared first on Coinpedia Fintech News
XRP is facing some big problems as its price has dropped below important levels like $0.60, $0.59, $0.57, and $0.55 since the year started. Even though it looked good on New Year’s Day, XRP hasn’t been doing well this month, losing 16% in just 24 days. This is the worst it has been since August 2023 when it dropped by a lot—26.75%.
Major Sell-off Leads to Price Drop
The reason XRP is going down is because the whole crypto market, especially Bitcoin, had a big drop. In the past week, all cryptocurrencies together lost $130 billion, and XRP lost 11% of its value.
Bitcoin’s price went up to $48,969, lifting other coins like XRP to $0.6240. But then, Bitcoin prices fell because big Bitcoin owners and long-term holders sold a lot.
The Grayscale Bitcoin Trust (GBTC), which charges a high fee, also added to the selling. Big investors sold their GBTC shares to switch to other things, making Bitcoin prices go down by 8.05% in the last week. Since XRP and other cryptocurrencies usually follow what Bitcoin does, they also went down.
Spot XRP ETF Approval
Against the backdrop of approved spot Bitcoin ETFs and ongoing talks about crypto exchange-traded funds (ETFs), speculation is mounting regarding the potential for a spot XRP ETF. Advocates for this product often emphasize XRP’s clear legal standing.
Last November, a fake BlackRock iShares XRP ETF appeared on the official Delaware ICIS platform, underscoring the market’s desire for an XRP ETF. Despite the persistent calls for such a product, no asset manager has taken the initiative to file for it.
Whale Began Dumping XRP
Whales, or large cryptocurrency holders, heavily impact the price movements of digital assets. The recent drop in Bitcoin and XRP prices is linked to whales selling off their holdings. For instance, a significant movement saw 29.1 million XRP transferred to Bitstamp on Monday, initiated by Ripple.
Data from Santiment supports the trend, showing a rise in addresses holding 10-100 million XRP while those with 100 million to 10 billion XRP have notably decreased this month. This widespread selling by major holders is shaping the current cryptocurrency market dynamics.
XRP Market Sentiment
The decline in XRP is attributed to both market sentiment and development activity on the XRP Ledger (XRPL), with these factors being closely linked. Higher development activity and more developers tend to influence a bullish market sentiment.
Presently, XRP has 45 full-time developers, ranking 49th among mainstream blockchains.