Here’s Why XRP Could Face Massive Volatility in March

Amid XRP’s struggle to keep up with the broader bullish trend in the crypto market, history points to further volatility ahead.

The price of XRP has gained 4.8% in the past 24 hours as the cryptocurrency rides a wave of bullish trends in the crypto market. The increase means the asset boasts a mild 5% gain on the monthly chart and could end February in the green.

Nonetheless, investors can expect increased volatility in the price of XRP in the coming month. If history is anything to go by, March has proven to be a productive month for XRP investors in the past three years.

Trading data shows that the cryptocurrency gained 37%, 4%, and 43% in March for the past three consecutive years. This impressive return adds to XRP’s historical average return of 21% in the month of March, which may encourage investors to pile in on the asset.

However, further data hints that it may not be an entirely smooth ride. The typical four-year cycle for the crypto market shows that XRP does not have impressive returns in the March of a halving year.

Instead, the cryptocurrency typically posts negative returns, as has been the case in the past halving years. For instance, XRP posted negative returns of 6.70% and 23% during the March 2016 and 2020 halving years.

It is noteworthy to mention that the -23% return in March was largely fueled by a broad market sell-off attributed to the COVID-19 pandemic. For many market participants, March 12, 2020, remains an unforgettable date as Bitcoin slumped as low as $4,000, losing 50% of its value in the space of two days. XRP hit a record low of $0.175 during the same month.

Bullish Market Favors XRP Rise in March

While data from the previous halving years indicate an XRP decline, the impressive returns over the past three years could strongly move prices in favor of the bulls. Additionally, the overall bullish state of the crypto market makes it less likely that the cryptocurrency will drop significantly in the coming month.

However, the crypto market has most times proven unpredictable. XRP bulls will have to match the broader market momentum to ensure the March streak continues. Otherwise, things may get pretty ugly, dampening hopes of XRP seeing a $1 value before the end of the year.