On December 30, Ripple (XRP) fell more than 4% to close at $2.05 amid a general decline in the cryptocurrency market due to falling liquidity and profit taking by traders ahead of the New Year. On the Binance exchange, the token hit an intraday low of $1.99, indicating strong selling pressure as key support levels are now open.
XRP has surged 230% since November on expectations that Trump's victory will bring regulatory freedom for US cryptocurrencies, appears to have exhausted the bullish momentum generated by post-election euphoria and has been in a consolidation phase since early December. Initially fueled by speculation of a possible resolution of Ripple's lawsuit against the U. S. Securities and Exchange Commission, the rally can no longer be sustained without positive regulatory and policy developments, and a renewed challenge to levels below $2 may not be out of the question for #XRP in the short term. LINE_. BREAK Even Ripple's debut in the RLUSD stablecoin market failed to dramatically improve the situation, providing only a short-term pump-up that could not be sustained. In comparison, RLUSD was launched on December 17 on XRP Ledger and Ethereum and has a modest current market value of $53 million. Despite the early stage of adoption, RLUSD's trading volume has skyrocketed, increasing 191% over the past 24 hours.
While RLUSD is in the spotlight, XRP has undergone significant liquidation over the past 24 hours, with prices briefly falling below US$2 and then rebounding, with long positions totaling US$4.46 million. According to CoinGlass data, the price decline has coincided with a drop in open interest, which currently stands at $1.9 billion, down significantly from $4.3 billion in early December.
The combination of the XRP price drop and the decline in OI suggests that traders are closing positions, confirming suspicions that the current price drop is due to liquidation and profit taking, rather than bears betting on XRP. If this is the case, the XRP price is likely to stabilize soon, unless selling pressure persists.
Trading volumes over the past 24 hours also fell to US$3 billion, down 50% from a week ago.
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