journalfront

Cryptocurrency

Why XRP's Price Dropped Sharply After November's Rally

2024-12-09

XRP, the token used by Ripple, has witnessed a significant price decline in recent days. On Monday, December 9, 2024, its price dropped by 9%, hitting intraday lows of $2.36. While XRP/USDT on Binance remains near all-time highs, this decline marks the steepest drop in over two months. The cryptocurrency market is showing a notable divergence as XRP experiences significant selling pressure.

Market Metrics and Technical Analysis

On the intraday hourly chart, XRP's price has dropped below short-term support around $2.4597, breaking through the trendline drawn from local lows at $2.0275. This indicates the potential for further short-term depreciation toward the mentioned support levels or the trendline extending from the late-November lows.Support Zones:- $1.5971: The peak from November 24.- $1.9951: Local highs from late November to early December.- $2.2075: The trendline coinciding with early December lows.Resistance Zones:- Trendline originating from December 5.- $2.4957: A zone defined by early December highs.- $2.7897: Local highs from December.- $2.8681: Another set of local highs from December.On the daily chart (D1), the long-term outlook for XRP remains bullish, with a projected rise toward the $5 mark. This optimistic forecast is based on a technical pattern evident on the chart. A "pole" formed throughout November, followed by the current correction resembling a "flag." A breakout above this flag pattern could result in a measured target near double the current price levels. At the same time, XRP is holding support at the 23.6% Fibonacci retracement level, near $2.33, which could provide a foundation for potential recovery if buying pressure increases.Some of the forecasts are even more ultra-bullish. However, in the short term, the funding rate has turned negative at -0.0885%, suggesting strong bearish sentiment in derivatives markets. Open interest has declined by 4.25%, reflecting diminishing trader confidence.

Fundamental Factors Impacting XRP Price

Bitcoin's Dominance: Bitcoin's historic breakthrough to $100,000 has redirected market focus and capital flows. While BTC's November rally provided support for XRP, investor focus has now shifted back to the leading cryptocurrency. This shift has led to increased capital inflows into BTC, resulting in a relative decline in demand for altcoins like XRP.Regulatory Environment: Despite Trump's nomination of a pro-crypto SEC chair candidate, ongoing regulatory uncertainties continue to impact XRP's market performance. The previous legal battles have left a lasting impact on investor sentiment.

Price Prediction and FAQ

Why is XRP falling? XRP is falling due to a combination of factors, including profit-taking after November's rally, bearish sentiment in derivatives markets, and broader market liquidations. Over $14.5 million in leveraged long XRP positions were liquidated in the last 24 hours, amplifying the downward pressure. Additionally, market attention has shifted toward Bitcoin following its historic surge to $100,000, diverting capital flows away from altcoins like XRP.Will XRP ever go up in price? Despite the current decline, XRP's long-term outlook remains bullish based on technical patterns such as the flag formation on the daily chart. If the price breaks out above the current correction zone, it could target levels near $5. However, this is contingent on increased buying pressure and improved market sentiment.How low can XRP price fall? In the short term, XRP could test lower support levels around $2.2075 or $1.9951, as suggested by the intraday chart. A breach of these levels might push the price toward $1.5971, the peak from late November. The price could also revisit the 23.6% Fibonacci retracement level at $2.33 if selling pressure persists.Is XRP worth holding? XRP remains a speculative asset with both high risks and high rewards. Its long-term bullish potential, as indicated by technical analysis, may appeal to investors with a higher risk tolerance. However, ongoing regulatory uncertainties and market volatility require careful consideration. Holding XRP should align with an investor's broader strategy and risk appetite.

Last week's announcement by Donald Trump to nominate Paul Atkins as the head of the Securities and Exchange Commission (S.E.C.) sent shockwaves through the crypto world. The price of Bitcoin soared to a hundred thousand dollars, and crypto enthusiasts were in a celebratory mood. This reminded me of the dot-com boom and its inevitable bust, which I chronicled over twenty years ago. There was the same excitement, predictions of higher prices, and uneasy feelings among some market participants.

Investment and Policy Shifts

Crypto investors, entrepreneurs, and pro-crypto donors had ample reason to be excited. Investing in Trump's victory and defeating crypto skeptics paid off. Under Gary Gensler's leadership, the S.E.C. took an aggressive approach towards the crypto industry. But with Paul Atkins in charge, the agency's lawsuits and cases may be put on hold, and a more friendly stance towards crypto assets is likely. "For crypto assets, the fundamental rules will be weakened, and the industry will expand with little regulation," said Dennis Kelleher. Crypto leaders hailed Atkins' choice as a landmark.

Comparison with Dot-com Boom

In the late 1990s, the dot-com boom was underpinned by the rise of online commerce. Speculative digital assets like Bitcoin can't be directly compared to those startups. But big speculative episodes rest on four factors: a new technology, an efficient communication method, financial industry participation, and a supportive policy environment. With crypto assets, Bitcoin and the blockchain met the first two requirements, but Wall Street and policymakers were suspicious. In the 2022-23 crypto bust, Bitcoin's price fell by more than 70%, and some big crypto firms collapsed. But with Trump in office, all four conditions seem to be in place for a broader bubble.

SEC's Stance on Crypto Assets

The S.E.C. is at the center of the crypto debate. During Gary Gensler's tenure, the agency argued that many crypto assets are securities and face extensive regulations. But under Paul Atkins, the S.E.C. may shift its position on whether crypto assets are securities or more like physical commodities. This could have significant implications for crypto firms like Coinbase and Ripple. A federal judge's ruling in favor of the S.E.C. against Coinbase was seen as a win, but the Ripple lawsuit had a different outcome.

Wall Street's Embrace of Crypto

After losing a court case in 2023, the S.E.C. approved Bitcoin exchange-traded funds (E.T.F.s), which have seen a significant increase in value since the election. BlackRock, Fidelity, and Franklin Templeton are among the financial firms offering these products, and Charles Schwab offers a "Crypto Thematic ETF". This is encouraging other financial firms to launch similar products.

Risks and Concerns

Economist Eswar Prasad is worried that recent developments could give the wrong impression about crypto assets. A full-blown financial blowup is a worst-case scenario, as seen in the real-estate bubble. Federal banking regulators have tried to keep crypto confined, but history isn't reassuring. During the 2022-23 crypto bust, three banks with ties to the crypto industry failed. Dennis Kelleher predicts that a second Trump Administration could lead to more crypto movement into the financial system.In conclusion, the Trump crypto boom presents both opportunities and risks. The future of crypto remains uncertain, and it will be interesting to see how these developments unfold.

In the hustle and bustle of holiday shopping, it's crucial to stay vigilant against scams. With the digital age bringing new challenges, Nebraska's consumer advocates are sounding the alarm. Over the past few years, we've seen various scams emerge, from gift card fraud to phony shipment delay texts. Now, the rise of cryptocurrency in online trading presents another hurdle during the holiday shopping crunch.

Key Tips to Avoid Holiday Shopping Scams

Avoid Sending Money via Cryptocurrency ATMs

If you're directed to convert cash to cryptocurrency at a convenience store kiosk and send money that way, it's likely a scam. As AARP Nebraska's Jina Ragland warns, scammers are using the same tactics as before but now soliciting payments through cryptocurrency ATMs like bitcoins. Remember, if it seems too good to be true, it probably is.

Don't fall victim to these schemes. Be cautious and stick to traditional payment methods when shopping during the holidays.

Be Cautious of Gift Card Tampering

Experts note that scammers can tamper with gift cards on store racks and steal the funds when the card is activated. It's best to ask for a gift card sold behind the counter. This provides an extra layer of security and reduces the risk of falling prey to gift card scams.

By taking this simple precaution, you can protect your hard-earned money and enjoy a worry-free holiday shopping experience.

Keep Software Updated for Fraud Protection

Regularly updating the software on your electronic devices is another important step in preventing fraud. This helps to close any security gaps and makes it more difficult for scammers to gain access to your information.

Don't overlook this crucial aspect of online security. By keeping your software up to date, you're taking an active role in protecting yourself from scams.

Be Wary of Suspicious Online Ads

If you see an online ad for something that appears too good to be true in terms of price, it's usually a fishy deal. Ragland emphasizes the importance of being skeptical and not falling for these enticing offers.

Take a moment to do some research and verify the authenticity of the deal before making a purchase. This can save you a lot of trouble and money in the long run.

Utilize Tracking and Shipping Services

Shoppers are encouraged to take advantage of tracking information and other shipping supplier services. By scheduling deliveries for when you or someone you trust is present to receive them, you can ensure the safety of your purchases.

This simple step can help you avoid the disappointment of missing a delivery or having your package stolen.

Disclosure: AARP Nebraska contributes to our fund for reporting on Budget Policy & Priorities, Consumer Issues, Health Issues, Senior Issues. If you would like to help support news in the public interest, click here.get more stories like this via email