XRP, which showed promising growth following the favorable ruling in the Ripple case last month, has been on a downturn. Several factors have combined, causing the cryptocurrency to hover just above the $0.50 threshold, a massive drop from the $0.83 mark.
From boom to bust: the rollercoaster ride
After the July 13 highs, XRP showed resilience despite a brief price correction. However, in late July, it lost its stronghold above $0.80 and found some stability around $0.70. However, this relief was short-lived. On August 4, after three relentless days of falling values, XRP broke the $0.70 mark.
The $0.60 mark, which has acted as XRP’s bulwark against further declines since Aug. 4, has only been able to withstand market pressure for so long. A sharp 14% drop recently caused XRP to fall below $0.50, a level unseen in more than a month.
Read more: Why did the crypto market crash today? Here are the main reasons
Legality and the wider market: Double Whammy
A major contributor to XRP’s downturn is the renewed concerns surrounding the Ripple versus SEC litigation. Recent legal decisions, most notably Judge Analisa Torres allowing the SEC to consider filing an interim appeal, further cemented the cryptocurrency’s fall.
Coupled with this, the broader cryptocurrency market was no help. An alarming market crash witnessed an astonishing $1 billion in assets being liquidated in a day. Major players like Bitcoin did not escape the carnage, briefly dropping below $26k.
Turbulent times ahead?
Currently, XRP is down 11% on a daily basis. Recent market data paints a bleak picture, with the Relative Strength Index (RSI) plummeting to record lows. This downturn resulted in the liquidation of nearly $23 million in XRP long positions in just an hour.
Read more: Mastercard partners with Ripple; XRP tumbles 14%
Should current market trends continue, XRP could trend further towards the 200-day EMA, possibly hitting the $0.45 mark. This puts XRP at risk of wiping out its entire gains in July, potentially plummeting to just $0.41, a nerve-wracking 20% dip from where it stands today. Indicators such as the RSI, which is currently hovering at 28, in addition to the AO histograms, all predict a bearish scenario in the near future.