Bart Leiberton mhNX
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The Cryptonomist
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Ripple: the price of XRP collapses
Last night the price of XRP, the cryptocurrency of Ripple, crashed by 30%.
However, this collapse is not due to problems related to Ripple or XRP, even if there are news circulating that could further negatively affect the trend of its price on the bull and bear crypto markets.
The collapse of the price of XRP (Ripple)
Until January 31, the price of XRP hovered around $3.10.
Already yesterday, however, during the day it had fallen below $3, but during the night it suddenly crashed even below $2.
In the following hours, it bounced back up to about $2.4.
Currently, the price of XRP is 15% lower than yesterday, and 12% lower than a month ago.
However, if the horizons of the analysis are broadened, it is discovered that the recent collapse is not really a big deal.
In fact, before Trump’s electoral victory, its price was $0.5, therefore compared to three months ago it is still 380% higher. However, after the bullrun at the end of 2024, there were those who hoped that its price could rise well above $3.
It should be remembered that the all-time high of XRP is still the $3.8 from early 2018, even if the current price is now only -38% from that peak. Furthermore, in mid-January of this year, it had risen to about $3.3, and it is probably this that convinced many that it had the strength to return to the highs shortly. However, this was not the case.
The reason for the bull of the price of XRP (Ripple)
It must be said that XRP is not the only crypto whose price crashed last night.
Although Bitcoin is limited to a -5% compared to yesterday, Ethereum is at -15%, Solana at -6%, BNB at -11%, and Dogecoin at -15%. Cardano is even at -19%.
The reasons for this collapse are two.
The first concerns all crypto, and it is the strong and rapid rise of the Dollar Index, which had a negative impact on the price of Bitcoin. The drop in the price of BTC then cascaded down to all the other crypto, as often happens.
The second reason, on the other hand, concerns only the altcoins and has not had an impact on Bitcoin. It is due to the fact that during the bull run at the end of 2024, the price of many altcoins had risen a lot, perhaps too much. Now that the sentiment has stopped being positive and has become negative, the prices of altcoins are discounting the excessive increases from the end of 2024.
At the base of the rise of the Dollar Index are the market fears stemming from the tariffs introduced by the Trump administration. In particular, the tariffs will increase the prices of important consumer goods, with the serious risk that this will cause an increase in inflation.
Trump himself, who in recent weeks had asked the Fed to cut rates, has now changed his mind and stated that the Fed did well not to cut them. Evidently, he is also becoming aware of the inflationary risks of his policy, so much so that the Fed might even be forced to increase rates in the coming months. This would reduce liquidity in the markets, and that is why the financial markets have already started to price in such possible future difficulties today.
Negative news from Ripple
As for XRP, however, there is also a negative news that comes from Ripple.
One must not forget that there are a total of about 100 billion XRP. Of these, however, only less than 58 billion have been issued on the markets, therefore Ripple still has more than 42 billion in reserve that are not currently present on the markets and are not being used.
Yesterday Whale Alert revealed that 400 million of those XRP locked in Ripple’s vaults have been unlocked. In theory, only a portion of those tokens should enter the market, because Ripple usually uses only 20% or 25% of the unlocked tokens to sell them on the market, while the rest should be locked in the escrow account and postponed to the following month.
It is still more than 1 billion dollars, and this could have an additional negative impact on the price of XRP.
The ETF on XRP
Within a few weeks, or a few months, the first ETF on XRP spot should be approved by the SEC.
Although there is much anticipation for this event, for now it does not seem imminent.
Furthermore, the launch on the US stock exchanges of the spot Ethereum ETF, in July of last year, did not bring short-term benefits to the price of Ethereum, and it is absolutely possible that something similar could happen for XRP as well.
However, the discourse changes in the medium/long term, because ETFs can allow the entry of new capital that was previously absent, as they come from traditional markets.
So if the short-term sentiment remains negative, the medium-term one already seems to be a little better. In the long term, however, everything is still to be defined, also because if sooner or later the Dollar Index were to start falling continuously and significantly, the current trend could literally reverse.
However, this collapse is not due to problems related to Ripple or XRP, even if there are news circulating that could further negatively affect the trend of its price on the bull and bear crypto markets.
The collapse of the price of XRP (Ripple)
Until January 31, the price of XRP hovered around $3.10.
Already yesterday, however, during the day it had fallen below $3, but during the night it suddenly crashed even below $2.
In the following hours, it bounced back up to about $2.4.
Currently, the price of XRP is 15% lower than yesterday, and 12% lower than a month ago.
However, if the horizons of the analysis are broadened, it is discovered that the recent collapse is not really a big deal.
In fact, before Trump’s electoral victory, its price was $0.5, therefore compared to three months ago it is still 380% higher. However, after the bullrun at the end of 2024, there were those who hoped that its price could rise well above $3.
It should be remembered that the all-time high of XRP is still the $3.8 from early 2018, even if the current price is now only -38% from that peak. Furthermore, in mid-January of this year, it had risen to about $3.3, and it is probably this that convinced many that it had the strength to return to the highs shortly. However, this was not the case.
The reason for the bull of the price of XRP (Ripple)
It must be said that XRP is not the only crypto whose price crashed last night.
Although Bitcoin is limited to a -5% compared to yesterday, Ethereum is at -15%, Solana at -6%, BNB at -11%, and Dogecoin at -15%. Cardano is even at -19%.
The reasons for this collapse are two.
The first concerns all crypto, and it is the strong and rapid rise of the Dollar Index, which had a negative impact on the price of Bitcoin. The drop in the price of BTC then cascaded down to all the other crypto, as often happens.
The second reason, on the other hand, concerns only the altcoins and has not had an impact on Bitcoin. It is due to the fact that during the bull run at the end of 2024, the price of many altcoins had risen a lot, perhaps too much. Now that the sentiment has stopped being positive and has become negative, the prices of altcoins are discounting the excessive increases from the end of 2024.
At the base of the rise of the Dollar Index are the market fears stemming from the tariffs introduced by the Trump administration. In particular, the tariffs will increase the prices of important consumer goods, with the serious risk that this will cause an increase in inflation.
Trump himself, who in recent weeks had asked the Fed to cut rates, has now changed his mind and stated that the Fed did well not to cut them. Evidently, he is also becoming aware of the inflationary risks of his policy, so much so that the Fed might even be forced to increase rates in the coming months. This would reduce liquidity in the markets, and that is why the financial markets have already started to price in such possible future difficulties today.
Negative news from Ripple
As for XRP, however, there is also a negative news that comes from Ripple.
One must not forget that there are a total of about 100 billion XRP. Of these, however, only less than 58 billion have been issued on the markets, therefore Ripple still has more than 42 billion in reserve that are not currently present on the markets and are not being used.
Yesterday Whale Alert revealed that 400 million of those XRP locked in Ripple’s vaults have been unlocked. In theory, only a portion of those tokens should enter the market, because Ripple usually uses only 20% or 25% of the unlocked tokens to sell them on the market, while the rest should be locked in the escrow account and postponed to the following month.
It is still more than 1 billion dollars, and this could have an additional negative impact on the price of XRP.
The ETF on XRP
Within a few weeks, or a few months, the first ETF on XRP spot should be approved by the SEC.
Although there is much anticipation for this event, for now it does not seem imminent.
Furthermore, the launch on the US stock exchanges of the spot Ethereum ETF, in July of last year, did not bring short-term benefits to the price of Ethereum, and it is absolutely possible that something similar could happen for XRP as well.
However, the discourse changes in the medium/long term, because ETFs can allow the entry of new capital that was previously absent, as they come from traditional markets.
So if the short-term sentiment remains negative, the medium-term one already seems to be a little better. In the long term, however, everything is still to be defined, also because if sooner or later the Dollar Index were to start falling continuously and significantly, the current trend could literally reverse.
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