An Impending Tsunami Or Just A Ripple? Examining Factors For The Possible Upcoming Ripple Price Drop XRP, the native currency of the Ripple networks, seems to be treading rough waters. It has been dealing with a descending triangle pattern since April 2021, and a year later, things might be getting even more unstable for the […] The post Possible Drop in XRP Price, Explained appeared first on ZebPay | Buy Bitcoin & Crypto.
An Impending Tsunami Or Just A Ripple? Examining Factors For The Possible Upcoming Ripple Price Drop
XRP, the native currency of the Ripple networks, seems to be treading rough waters. It has been dealing with a descending triangle pattern since April 2021, and a year later, things might be getting even more unstable for the world’s sixth-biggest crypto asset. If you are keen to buy XRP and are waiting for a Ripple price drop, you may want to keep on reading.
A mix of internal and external factors are causing these fluctuations. While its recent positive progress in the US lawsuit regarding the SEC sanctions against it may be a promising sign, far more challenges lie ahead for XRP and Ripple.
Slippery Slopes and a Potential Ripple Price Drop
Ripple’s XRP price faces the ominous risk of dropping by more than 25% in the coming weeks. A few key reasons could explain the possible XRP price drop. . While some of these factors are XRP-specific, others influence the entire market and will go beyond just a Ripple price drop.
The Link Between The Descending Triangle And The Ripple Price Drop
As mentioned earlier, XRP has been restricted to a descending triangle pattern for nearly a year. Movement of this nature has meant that the highs have gradually lowered over time while still finding a robust support level around $0.55 even when the Ripple price drops.
By the end of March 13, XRP’s price was again pushing against the triangle’s upper trendline, causing concerns in the market. If historic trends repeat themselves, this could trigger another pullback move to the support level it has had for the past year, close to $0.55. This Ripple price drop would be within the predicted range of 25-30%.
This downward trend is further accentuated by other bearish catalysts formed in sequence with the triangle resistance, contributing to a potential Ripple price drop.
XRP Market Supply Concerns
With the XRP price drop, you may be deciding to buy XRP yourself. However, the price could be even further impacted by Ripple’s decision to lock about 55% of the total possible supply or 55 billion XRP into a series of escrows.
This is a move to control the amount of new XRP introduced into circulation over a year. Every month, a total of one billion XRP will be released into the market for 55 months. However, the actual number of XRP circulated each month will likely be even lower. Furthermore, any excess XRP remaining at the end of every month will then be placed into a new escrow, released in the first month without any planned escrow releases. The thought process behind the escrow is to provide more predictability and stability to the supply of XRP. However, this could trigger another Ripple price drop.
As a step in implementing this escrow, Ripple transferred nearly 100 million XRP, equivalent to almost $40 million, to exchange wallets on March 3, 2022. Another 700 million XRP were kept in an escrow market. Therefore, there is speculation that 200 million XRP may soon flood the market to manage Ripple’s expenses and distribute the cryptocurrency to its global partners. As the net supply increases and more people buy XRP, the Ripple price drop seems unavoidable, especially if the currency is released within a short period.
Social Media Movement Triggering A Ripple Price Drop
Another key indicator of market movement is social media conversation. Sentiment, a financial market content and data platform in the blockchain and cryptocurrency space has provided invaluable insights into XRP price drops in the past. Social media trends impact the market movement. As the cryptocurrency has started trending, its value has increased in the past. Subsequently, when crowds begin responding to digital conversations and interest in XRP starts fluctuating, Ripple price drops.
On March 12, Santiment noted a significant spike in searches for #XRPNetwork, which coincided with XRP’s price rising. Keeping previous trends in mind, we can expect another Ripple price drop as the market settles down.
The Russia-Ukraine conflict has affected markets worldwide, and cryptocurrency has been no exception to being impacted by this turmoil. With uncertainty still presiding over the on-ground sanctions, and international sanctions affecting markets, further instability is expected worldwide. A Ripple price drop might be short if these deadly and unfortunate conflict escalations continue.
Staying Cautious Yet Optimistic
While XRP’s possible upcoming fluctuations may be a cause for concern for many, investors looking to buy XRP should be reassured that the cryptocurrency has overcome such challenges before. Plan your investment moves keeping a potential Ripple price drop in mind, watch this space for more invaluable cryptocurrency insights, and use Zebpay to buy and sell crypto today!