Why Xrp Down Today? Xrp Fails To Hold $2.2 Amid Etf Profit-Taking & Market-Wide Sell-Off

Xrp Fails To Hold $2.2 

The XRP is currently trading at around $2.04. The price is down by 6.75% in the past 24 hours. The market cap touched $123.54 billion. The XRP price declined by over 18% in the past month, while the 24-hour trading volume is up by 84%, suggesting heightened selling pressure. 

The Ripple-backed token is trading below the 50-day and 200-day Simple Moving Average. The token failed to hold the critical support level at $2.16. The 14-day Relative Strength Index (RSI) reading of 39 suggests that the selling pressure is quite high. On top of it, the high volatility of 6.50% further shows the prevailing uncertainty. Another key indicator, the Fear and Greed index, is flashing 24 (Extreme Fear). Today’s price plunge is attributed to a combination of factors, including the market-wide liquidations to technical breakdown of XRP. 

Why Is Xrp Down Today? 

The Ripple-backed token is hit by a series of backlashes, ranging from crypto market-wide liquidations, hints of hawkish policy shift in Japan, ETF profit-taking, and Yearn Finance security breach. Amid the heightened uncertainties, the XRP underwent a technical breakdown as well. 

The Yearfiance Security Breach & Hints Of Policy Shift In Japan Trigger Crypto Sell-Off

The Ripple-backed token faced a multitude of backlashes today. The broader crypto market saw liquidations worth over $600 million. The forced closing of leveraged positions had further dragged the market down. The overall crypto market cap dipped to 2.93 trillion, more than 5% down in the past 24 hours. The bitcoin fell to $85k zone, dragging the other flagship coins along with it. 

One of the key events that triggered the crypto crash was a security breach at Yearn Finance, a DeFi platform. The Yearn Finance’s yETH vault faced a major hack, resulting in the loss of 1000 ETH worth around 3 million. The hackers exploited a bug in the network, which allowed them to mint unlimited coins of yETH tokens. They used these tokens to drain real assets from the liquidity pool. 

Japan’s 2-year bonds recorded a 17-year high on December 1. The investors are speculating about a monetary policy shift in the country. The Bank of Japan (BOJ) Governor Ueda had earlier hinted at December rate hikes. The high interest rates will strengthen the Yen and make traditional investments more attractive. Nevertheless, the tightening of monetary policy is bad news for the fragile and high-risk crypto market. The speculations led the investors to assume risk-averse positions, which led to a crypto sell-off across the Asian market. The crypto market is already under macro pressure due to uncertainty over the Fed rates, and now the developments from the East have added another headwind. Furthermore, the ETF profit-taking and weak technical indicators accentuated the bearish sentiment. 

The Etf Profit-Taking And Technical Breakdown 

As many XRP ETFs neared SEC approval, numerous traders have bought the token, anticipating a price rise amid the launch of these ETFs. This led to a price surge for the Ripple-backed token before the ETF got approved and went live. Though the XRP ETFs recorded a monthly total net Inflow of $666.61 million, the traders sold the tokens following the classic “buy the rumor, sell the news” strategy. The ETF profit taking became a major reason for today’s price plunge. 

Amid the multiple headwinds, XRP faced a technical breakdown. The token slipped below the key support level of $2.21 and $2.24. Failure to hold the current $2.05 is projected to cause further corrections. A slide to $1.7-$1.8 zone can not be dismissed considering the buoying selling pressure. Moreover, the 24-hour open interest rate also fell, mirroring the broader anxiety gripping the crypto market. The XRP alone recorded about a $13.2 million liquidation in the past 24 hours. 

A strong market stimulus, either in the form of ecosystem development or macro tailwind, is required for XRP to rebound. Besides, since the overall crypto market is reeling under uncertainties, deeper corrections in the upcoming week can not be ruled out.