In an unexpected turn of events, Ripple’s $XRP token saw its price plummet by approximately 45% in a flash, marking one of the most dramatic price movements in its history.
The drop was swift, with the cryptocurrency sinking below crucial support levels that had previously acted as a floor for the asset.
However, the cryptocurrency market quickly responded to this downturn with a surge in buying pressure, which helped XRP recover a significant portion of its losses.
Within a short time, XRP managed to regain 42% of the value it had lost, offering traders who caught the price bottom a potential profit of nearly 50%.
Panic-Selling Triggers Breach of Key Support Levels
The sharp price decline was initially driven by a wave of panic-selling, which breached two critical support levels for XRP—$2.62 and $2.16.
These levels had provided stability for the token in the past, but their breach sparked uncertainty within the market.
The quick rebound raised some questions, as the event revealed the fragility of the support structure that had previously held the price steady.
While the recovery demonstrated that XRP still had demand at lower price points, the sharpness of the drop and the speed at which it occurred raised concerns about the stability of the cryptocurrency moving forward.
Investors are now closely monitoring the asset’s ability to maintain strength in the face of future price fluctuations.
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Concerns Over Market Volatility and Long-Term Stability
Although XRP’s rapid recovery suggests strong buying interest at lower prices, it has also raised concerns regarding the token’s long-term stability.
The sudden breach of key support levels suggests that future price declines could be harder to recover from without continued buying momentum.
Traders and analysts are watching the 200-day Exponential Moving Average (EMA) closely, as it may serve as the next potential support level around $1.60.
Should XRP fail to maintain its recent upward trajectory, the market could test this level again, further emphasizing the uncertainty surrounding the cryptocurrency’s future price movements.
XRP’s Market Position and Recent Trading Activity
As of now, XRP has recovered to $2.61, reflecting a 10.22% increase in the last 24 hours.
Despite this rebound, the asset has still seen a 16.23% drop over the past week, indicating the ongoing volatility in XRP’s trading pattern.
With a market capitalization of over $150 billion and a circulating supply of 58 billion tokens, Ripple’s $XRP remains a major player in the cryptocurrency market.
However, the sharp price swings and lingering questions about the token’s stability leave some investors cautious about its future.
The volatility experienced recently highlights the risks involved in trading XRP, especially as the market remains wary following this sudden fluctuation.
Broad XRP Trajectory: A Surge in Demand and ETF Speculation
In addition to the dramatic price movements, Ripple has seen a surge in demand for its token. A report indicated that XRP’s demand grew by 40% in the fourth quarter of 2024, following a reduction in the regulatory pressures from the SEC.
The positive shift in regulatory sentiment was coupled with an increase in XRP-related exchange-traded products (ETPs), as four firms in the U.S. registered XRP-related products this month alone.
Additionally, there has been growing optimism surrounding the potential approval of an XRP ETF in 2025, with Polymarket assigning an 82% probability to the approval.
If successful, XRP would become the third cryptocurrency to receive an ETF in the U.S., following Bitcoin and Ethereum.
Furthermore, on-chain data shows that XRP’s decentralized exchange (DEX) trading volume reached $1 billion in Q4, signaling the token’s continuing potential despite recent price turbulence.