The cryptocurrency market went through considerable turmoil during the last week, and most of it is trading in the red.
Some lost more than others, however, with XRP being amongst the altcoins that charted a massive crash. It’s down more than 17% for the past seven days.
The first and the most obvious reason for XRP’s crash is that the market is going down as well. This tends to happen almost always within the cryptocurrency industry. Bitcoin’s price makes up for such a huge percentage of the total market that whenever it goes down, it drags it with it.
With XRP, however, the decline was exacerbated, perhaps because of a few additional reasons. First things first, its market capitalization, being much smaller compared to that of Bitcoin, needs significantly lower selling pressure to go down. Therefore, when users started panicking and selling in fear of further declines, XRP felt the pain.
But there’s another factor that’s specific to XRP’s price – the lawsuit against the US Securities and Exchange Commission. It has taken its toll on the cryptocurrency for the past few years. The reason is that investors, especially institutions, are particularly careful with XRP because of the allegations that the SEC considers it to be a security. Even though the Commission might be backing off from its initial claims with some very important clarifications, the lawsuit can still go either way, despite the recent partial victory for Ripple.
That seems to be the big question, and there are multiple factors that might contribute to a potential recovery.
Regulatory developments, as well as these in the lawsuit against the SEC, will likely have a huge impact on the price.
In addition, technological advancements within the Ripple ecosystem could also help the XRP price regain its previous footing. These include but are not limited to integrating new features, increasing the network’s throughput, and whatnot.
The broader market sentiment will also play a major part.
From a technical perspective, there’s very strong support located at around the $0.42 mark. This is what seems to have stopped the market from going lower during the most recent dump, and it might as well provide a leg to stand on for a future potential rally.
The post Why is the XRP Price Crashing and When Will it Recover? appeared first on CryptoPotato.
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