XRP

The price of XRP has been on a sharp decline following the announcement of the launch of the stablecoin RLUSD. After reaching $2.73, the coin has dropped by more than 18% just 24 hours after the launch of the Ripple stablecoin.

On December 17, the stablecoin RLUSD was unveiled, which led to a significant spike in the price of XRP. At the beginning of the week, XRP was trading at around $2.35.

On Monday evening, after Ripple announced the launch of RLUSD scheduled for the following day, the price of XRP rose to nearly $2.6. The cryptocurrency surged again, reaching a multi-week high of $2.73 on the day of the launch.

Despite TRON’s bullish trend, XRP has struggled to hold onto its gains. With the broader market correction, XRP price has started to retreat, dropping to $2.41 at the time of this post, while the market-wide decline has intensified.

Fed Rate Cut Causes Market Bloodbath

The market-wide correction was partly driven by the Federal Reserve’s decision to cut interest rates by 25 basis points. The move, though widely expected, sparked a wave of panic selling across the crypto space. The latest rate cut sent all major cryptocurrencies sharply lower, with XRP being the exception, falling to a seven-day low of $2.19.

XRP has surged more than 130% in the past month, but has given up significant gains after the market tumbled. According to analysts, the real cause for concern was not just the rate cut itself but the realization that inflation could last longer than expected, and that the Fed may not be ready to ease its tightening measures.

"It wasn't the 25 basis point rate cut today that spooked markets, it was the realization that inflation could persist for longer," said one market analyst.

The Fed is not unanimous in its support for these cuts. This one sentence sent the US dollar soaring to levels not seen since 2022. When the dollar rises, riskier assets like Bitcoin and cryptocurrencies tend to fall — and that’s exactly what happened.

As RLUSD launches, there may be a supply shortage in the early days before the market stabilizes. There is actually someone willing to pay $1,200/RLUSD for a fraction of a single RLUSD. The tools will show you the highest price anyone is willing to pay, even if it’s for… https://t.co/LOx4rGiiiJ — David “JoelKatz” Schwartz (@JoelKatz) December 15, 2024

Bitcoin has seen a massive drop in the past 24 hours, dropping as much as 3% to a low of $102,000. The drop in BTC has led to panic selling, which has led to losses in other cryptocurrencies. For example, Ethereum extended its losses to two days, dropping below $3,800, recording a 4.5% drop in the past 24 hours.

Dogecoin (DOGE), Cardano (ADA), Solana (SOL) are down 6%, 5.7%, and 3.2% respectively over the past day. Overall, market sentiment has been mixed, with some analysts suggesting that the volatility could continue until things calm down.

The downturn has also led to massive liquidations in the crypto derivatives market. According to Coinglass data, nearly $792 million worth of positions have been liquidated in the past 24 hours, with long positions accounting for $661 million of that total.

BTC led the way, with $149 million in liquidations, followed by ETH and XRP, which accounted for $126 million and $42 million, respectively.

However, analysts like Ali caution investors against panic selling. “Markets hate uncertainty, but they also thrive when the dust settles,” he noted, urging caution and suggesting that patience may be needed for a potential recovery.