In a new edition of this week’s downward trend, we have the altcoin Ripple (XRP) which overtook Ethereum and became the second largest cryptocurrency by market cap – and its recent price drop which went viral everywhere in the crypto news.
The intense downtrend finally took a toll on Ripple, even though it seemed like the cryptocurrency is resistant to it. Ripple, which is now the second most valuable cryptocurrency, is no longer up in value on a monthly basis. Over the past 30 days, XRP maintained the $0.5 level relatively well with minimized losses – during a period when Bitcoin and other top coins fell by 20% and even more.
If you are asking yourself what was the primary reason for Ripple’s drop, the truth is that XRP is a liquidity network that provides major banks and financial institutions the ability to move cross-border payments with low fees. Hence, a large supply of XRP is crucial for the Ripple blockchain network to operate.
This week, around $16 million was removed from the Ripple Distribution wallet to an unknown one, injecting more XRP into the market. Over the past 12 hours, XRP fell from $0.48 to $0.41 and then recovered at the $0.43 support level.
It is entirely possible (given that XRP has been successful in maintaining the $0.4 support level) – that this increase of the supply of XRP in circulation affected the short-term price trend of XRP.
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