Here’s Why XRP Price is Falling: Can it Recover?

Key Insights:

• XRP price plummets over 11% amid massive altcoin selloff and market uncertainty.
• US SEC’s sudden U-turn on Bitwise Crypto ETF sparks renewed uncertainty around altcoin-based ETFs.
• Investors book massive profits after XRP’s 392% year-over-year surge, fueling selloff concerns.

The massive selloff in the altcoin market has weighed on the investors’ sentiment, sparking concerns over a potential delay in the altseason. Amid the top altcoins, XRP price took the biggest hit, losing more than 11% at press time.

This has sparked speculations that the crypto can witness a further dip ahead, potentially losing its $3 support. Although the market pundits remain positive on the future trajectory of the coin, derivatives data suggest otherwise.

In addition, the ongoing liquidation data also indicates that the investors are offloading their holdings after the recent robust rally. However, it’s worth noting that the large investors or whales have contributed the most to the recent rally in Ripple coin.

So, here we take a quick tour of the potential reasons that might have triggered the massive selloff in the XRP market.

Altcoin Selloff Weighs on Sentiment

The recent plunge in XRP price could be due to the broader altcoin market selloff. Besides, BTC price has also recorded marginal losses, indicating a waning risk-bet appetite of investors.

However, Ripple coin was one of the top laggards among the top altcoins. A flurry of market watchers said that investors are taking a pause after the recent robust surge in the broader market.

Meanwhile, Bitcoin dominance also recorded a significant increase, soaring to 61.3%. This surge suggests that the market participants are leaning towards BTC, while offloading their altcoin holdings.

US SEC delaying Bitwise Crypto ETF

The US SEC has sent shockwaves through the crypto market after granting accelerated approval for Bitwise’s 10 Crypto Index ETF. However, the agency then reversed the decision hours later with a stay order. The ETF would have tracked ten digital assets, including XRP, Bitcoin, and Ethereum.

Notably, the sudden U-turn has sparked renewed uncertainty around altcoin-based ETFs, particularly those including XRP, Solana, and Cardano. Investors are now left wondering about the SEC’s stance on crypto ETFs, especially with XRP ETF developments being closely watched.

Meanwhile, it appears that the development has weighed on the traders’ sentiment. As a result, XRP price has slipped, reflecting the market’s reaction to the SEC’s flip-flop decision.

Profit Booking & Ripple Co-Founder’s Move Sparks Speculation

Another potential reason behind the recent selloff could be the profit-booking strategy by market participants. For context, market participants often book profits after an asset records a significant surge.

Having said that, it appears that the year-over-year (YoY) surge of over 392% in XRP price has allowed market participants to book massive profits.

In addition, another potential reason could be the recent reports suggesting that the Ripple co-founder, Chris Larsen, is actively moving his XRP holdings.

According to a recent ZachXBT report, Larsen has transferred 50 million XRP, worth $175 million, to four addresses. It has fueled speculations that the Ripple co-founder is dumping his holdings, dampening the investors’ sentiment.

Can XRP Price Recover?

XRP price has lost more than 11% over the last 24 hours and slipped to as low as $2.99. However, during writing, it has regained some of its losses and rested at $3.09.

Its trading volume also rocketed 142% to $17 billion. On the other hand, CoinGlass data showed that XRP Futures Open Interest fell more than 14% to $9.2 billion, reflecting a gloomy momentum in the market.

However, despite that, investors remain optimistic about the potential future movement of the Ripple coin.

Notably, analyst Ali Martinez recently said that Ripple whales have acquired 280 million XRP over the last 10 days, indicating the growing confidence of large investors.

Simultaneously, EGRAG CRYPTO has also previously predicted a likely retreat in the asset’s price.

However, the expert also cited the current movement as a healthy plunge, which might allow more traders to enter the market at a lower price.