XRP price slips as RLUSD market cap hits $53m, liquidations rise

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As a seasoned crypto investor with battle scars from the 2017 bull run and subsequent bear market, I’ve learned to navigate the turbulent seas of the cryptocurrency market with cautious optimism. The recent retreat of XRP, while disappointing for short-term gains, is hardly surprising given the current market climate and the impending Fed decision.

On Wednesday, the cost of XRP dipped due to a wave of declines sweeping through the cryptocurrency market in anticipation of the Federal Reserve’s upcoming decision.

On Wednesday, Ripple (XRP) experienced a decline of more than 5%, essentially undoing much of the progress achieved during Tuesday following the debut of the RLUSD stablecoin.

Due to the drop, there was a substantial selling off of optimistic trades, amounting to more than $15.19 million in total. This process is called liquidation, where exchanges forcibly close positions because of insufficient collateral. Additionally, trades worth over $4.6 million that were bets against the market were also liquidated, as reported by CoinGlass.

Yesterday, as expected, Ripple pulled back following the debut of their new RLUSD stablecoin. The stablecoin has had a strong start, amassing over $53 million in assets according to CoinMarketCap. Its 24-hour trading volume exceeded half a million dollars.

In a highly competitive market, the RLUSD stablecoin finds itself challenged. Tether currently leads the pack with over 60% of the market share, while USD Coin, Etherna USDe, USDS, and Dai trail closely behind. Notable mentions among other stablecoins include First Digital USD and USDD, associated with Justin Sun.

Historical precedent indicates that even prominent stablecoin launches can encounter challenges. Case in point, PayPal’s PYUSD, with a market cap of $447 million, despite its significant fintech influence. Likewise, USDD, launched in 2022, has only managed to reach a market cap of $745 million over the past two years.

The drop in XRP’s price might be due to investors taking profits after the RLUSD launch and uncertainty surrounding the Federal Reserve’s last interest rate adjustment this year. Economists predict a “hawkish cut,” where rates are lowered by 0.25%, but with a potential halt in 2025. This apprehension arises from economic policies under President-elect Donald Trump, including immigration reforms and tariffs, which could lead to inflation.

Despite current circumstances, XRP holds promising triggers in the future. There’s a possibility that the revised Securities and Exchange Commission could withdraw its appeal and grant approval for a spot-based ETF. Additionally, Ripple Labs might opt for an Initial Public Offering (IPO) as well, which could significantly impact XRP’s value.

XRP price may be forming risky patterns

According to the daily analysis, there’s a possibility that XRP is shaping up two potentially risky trends. Initially, it appears to have created a shooting star candlestick pattern on Tuesday, characterized by a small body and a lengthy upper wick, which frequently indicates a bearish reversal following an uptrend.

Additionally, it appears that the price of XRP could potentially create a double top formation at approximately $2.89. This pattern is characterized by two high points and a horizontal line, known as the neckline, which currently sits at $1.8958, marking its lowest point this month.

Given my experience as a crypto investor, there’s a possibility that I might see XRP’s value dropping further in the coming days due to mean reversion. This is because XRP remains quite elevated compared to its 50-day moving average. However, if XRP manages to break above its year-to-date high of $2.89, it would be a clear sign of more substantial growth ahead.

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2024-12-18 18:40