That fluctuation surfaced in Ripple’s XRP token which experienced a spike in price only to crash throughout the week. The trigger for this explosive movement was reportedly the stablecoin RLUSD released on Ripple on December 17th. Before the RLUSD launch, investor expectations and anticipation over the possibility of the token driving increased usage of XRP. For real-life applications, the price of the token goes from around $2.35 to almost $2.60. At present, the XRP’s value is $2.13.
However, the enthusiasm for the debut diminished sharply. After the bullish run that saw XRP gain a healthy percentage point. The reversal pattern began to develop and later on plunged to a six-day low, of $2.23. This downward trend followed other market correction confusion brought about by the most recent decision of the Federal Reserve on interest rates, which also applied pressure on XRP price.
Aftermath of Crash
The reduction in the price after the RLUSD launch was mainly a result of the following factors. Consequently, there is a certain school of thought which bears severe blame, firstly was this a classic case of “sell-the-news”? People invest with the expectation of good news or events that pop up. So many people will invest expecting a positive outcome hence pushing the prices up. When the event occurs and this hype is over. People take the profit and realize that the situation may be different leading to the price drop.
Secondly, the overall bullish trend of the cryptocurrency market declined, possibly due to a decision initiated by the Federal Reserve. This correction, which affected all markets undoubtedly played a part in XRP’s decline, exaggerating the “sell-the-news” phenomenon.
In addition, the possibility of an XRP ETF in the United States remains indecisive to the present day, putting a shadow on the cryptocurrency. While an ETF can greatly increase the buying and awareness of XRP by investors, analysts argue that Ripple could be a hindrance due to the legal issues that it has with the SEC. The attention that the SEC pays to Ripple’s business model and qualification of XRP as the security can complicate the approval. The unresolved litigation and the shifting of the regulatory environment will of course have a decisive impact on XRP and price development.
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