Key Reasons Behind the Recent 8% Drop

XRP, the cryptocurrency tied to Ripple, saw a sharp drop of nearly 8% today bringing its price down to $2.36. This marks the steepest decline in over two months, even as the token stays close to its all-time highs. While it remains close to its all-time highs, this sudden dip has left investors questioning the reasons behind the bearish momentum.

XRP’s Price Drop by 8%

One of the main factors behind the drop is Ripple CEO Brad Garlinghouse’s recent appearance on CBS’s 60 Minutes. While the interview covered Ripple’s challenges, it left out crucial information most notably, a Federal Judge’s ruling that XRP is not a security.

This omission disappointed many in the crypto community and frustrated Garlinghouse, who called it a missed opportunity to address Ripple’s legal struggles. Following the broadcast, XRP’s price plunged by 8%, reaching $2.35 within a single day.

Liquidations Add More Pressure

XRP’s drop became even worse due to a surge in liquidations. In the past 24 hours, over $14.5 million worth of long positions on XRP were liquidated. This was part of a broader $358 million sell-off across the crypto market, which triggered a ripple effect, pushing prices down further.

XRP’s trading volume surged to $12 billion in the last day, highlighting increased market activity. However, this selling pressure also caused XRP’s market capitalization to drop below $136 billion, pushing it back behind Tether (USDT) in the rankings of top cryptocurrencies.

Adding to the pressure, many investors seem to be taking profits after XRP’s strong rally in November. At the same time, attention in the crypto market is shifting toward Bitcoin and Ethereum, leaving XRP with less demand.

Curious about where XRP is headed? Read our long term XRP price prediction to uncover insights on potential breakouts and future trends!

What’s Next for XRP?

From a technical standpoint, XRP has broken below key support levels, including $2.45. This suggests that prices could fall further in the short term.

On a more positive note, XRP still holds long-term potential. It is currently hovering around the 23.6% Fibonacci retracement level at $2.33, which could act as a support zone. Analysts believe that if XRP can break above $3, it could pave the way for a rally toward $5.

For now, short-term sentiment remains bearish due to negative funding rates and declining trader confidence. 

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