XRP is now nearing 3-year lows: what’s behind the massive correction? 🚨 This article is 5 years old...
XRP is now nearing 3-year lows: what’s behind the massive correction?
3 min read
Updated: Mar. 24, 2020 at 5:41 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The price of XRP is nearing a three-year low, hovering at around $0.15. Last week, XRP fell to as low as $0.114, which it has not hit since May 2017. The underperformance of the cryptocurrency against both Bitcoin and the USD comes as the appetite for high-risk assets is increasingly on the decline.
XRP should theoretically be outperforming most major cryptocurrencies
Since the 2017 bull market, XRP has struggled to maintain strong momentum despite high-profile partnerships with major financial institutions in the likes of SBI Holdings and Moneygram.
Since surpassing the $1 resistance level in April 2018, XRP has never come close to retesting it again, recording five consecutive lower lows at a larger time frame over the past three years.
In April 2018, September 2018, June 2019, and February 2020, XRP rejected $1, $0.77, $0.5, and $0.35 respectively, leading to an extended bear market.
Theoretically, XRP should have outperformed major cryptocurrencies in 2020 following a decline in sales of the cryptocurrency by Ripple, a company that develops infrastructure for the ecosystem.
In the fourth quarter of 2019, Ripple substantially dropped sales of XRP to institutions and the distribution of the cryptocurrency to exchanges.
On its blog, the company noted:
“Last quarter, total XRP sales were $13.08 million (USD) vs. $66.24 million the previous quarter. In addition, Ripple continued the pause of programmatic sales, focusing solely on our over-the-counter (OTC) sales with a few strategic partners, who are building XRP utility and liquidity in strategic regions including EMEA and Asia.”
The decline in XRP sales likely alleviated selling pressure on the cryptocurrency exchange market, which, in theory, should have served as a factor for recovery. In spite of lower XRP sales, the cryptocurrency found it difficult to break out of any meaningful resistance level in recent months.
As the coronavirus pandemic removed any appetite for high-risk assets including single stocks and cryptocurrencies, the steep correction of the cryptocurrency intensified.
When the Bitcoin price dropped to as low as $3,600 in a fastened price drop due to a cascade of liquidations across all exchanges, the XRP price dropped to as low as $0.114.
Is there any hope for recovery?
The current price trend of XRP is similar to that in early 2017, prior to the bull run of cryptocurrencies that saw the Bitcoin price spike to as high as $20,000 and $23,000 on exchanges in South Korea.
For XRP to see a strong recovery to previous highs in the medium-term, it would need to see a December 2017-esque upsurge to cleanly break out of resistance levels at $0.35, $0.5, $0.77, and $1.
At this macro landscape where the institutional sell-off of all types of assets is rapidly increasing on a daily basis, major cryptocurrencies including XRP are unlikely to recover until the U.S. stock market and global equities rebound.
With fiscal policies and large-scale stimulus packages unable to boost the confidence of investors towards the stock market, the cryptocurrency market is anticipated to stagnate over the next few months.
XRP Market Data
At the time of press 5:41 am UTC on Mar. 24, 2020, XRP is ranked #3 by market cap and the price is up 2.92% over the past 24 hours. XRP has a market capitalization of $6.89 billion with a 24-hour trading volume of $2.14 billion. Learn more about XRP ›
Crypto Market Summary
At the time of press 5:41 am UTC on Mar. 24, 2020, the total crypto market is valued at at $179.4 billion with a 24-hour volume of $151.32 billion. Bitcoin dominance is currently at 65.53%. Learn more about the crypto market ›
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The XRP Ledger is a decentralized cryptographic ledger powered by a network of peer-to-peer servers.
Ripple
Ripple is a US-based technology company which develops the Ripple payment protocol and exchange network using XRP, the digital asset native to the XRP Ledger.
