The XRP collapse below the $0.60 pivotal level today is due to a confluence of factors, including the broader market drop, macro conditions and unique whale selloffs.
XRP is currently witnessing sustained bearish pressure after a quarter of underperformance. The crypto asset failed to leverage the broader market uptrend from last October to this March, closing the first quarter of 2024 with a meager 2.25% increase, when the rest of the crypto market surged by 63%.
In a more concerning turn of events, XRP has now collapsed 5.43% in April to breach below $0.60, offsetting the minor gains it picked up this year. The token is now down 2.9% year-to-date as the bears take control of the scene.
XRP Down Amid Crypto Market Bloodbath
XRP’s latest bearish movements are attributable to multiple factors. One of these is the ongoing market-wide bloodbath. The broader crypto market is currently facing a retracement, slumping by 7.36% this month as Bitcoin (BTC) and other assets record declines.
For context, Bitcoin is down 6.70% this month, Ethereum (ETH) has collapsed by a steeper 8% drop, while Solana (SOL) is currently facing a 10% decline within the same timeframe. This ongoing onslaught has impacted XRP’s value, triggering an equal drop in price.
US Manufacturing PMI Data
Meanwhile, the broader market collapse was triggered by macroeconomic conditions in the United States. The US Manufacturing PMI for March was adjusted to 51.9 from an initial 52.2.
This change, announced yesterday at around 13:45 (UTC), made traders less optimistic about a Federal Reserve rate cut in June, with odds dropping from 60% to 56.9%, according to the CME FedWatch Tool.
For the uninitiated, the Fed’s interest rate decisions impact risk asset markets, including crypto. High rates generally make safer investments like bonds more appealing than riskier ones like crypto.
Fed Chair Jerome Powell’s comments last week suggested the Fed is not rushing to cut rates, which does not bode well for crypto. Ongoing inflation concerns, despite a slight ease in the Core PCE price index, remains a reason for the U.S. Central Bank to keep rates higher for some time.
With the recent manufacturing data hinting at a stronger economy, further reducing chances of a potential rate cut, the crypto market took a hit. Investors have seen the possibility of high rates continuing and are now moving their capital from crypto to less risky investments like bonds.
XRP Investors in Distribution Campaign
Another factor compounding the bearish pressure on XRP is a distribution campaign embarked on by whales and sharks. Data from Santiment confirms that up to three tiers of addresses holding between 10,000 to 10,000,000 XRP tokens, have persistently reduced their balances since the start of the year.
Specifically, investors holding 10,000 to 100,000 XRP collectively had a balance of 6.86 billion XRP as of Jan. 1. This figure has dropped to 6.77 billion as of press time. Within the same timeframe, the balance of those with 100,000 to 1,000,000 XRP has slumped from 6.72 billion to 6.63 billion XRP.
Similarly, whale addresses holding between 1,000,000 and 10,000,000 XRP have seen their cumulative balance decline from 3.72 billion on Jan. 1 to 3.63 billion today. This sustained selloff campaign has contributed to XRP’s downward pressure, as investors pivot to other assets in fear of missing out on the bull run.
While XRP has held up better than the broader market amid the ongoing downturn, it still performs below par compared on a year-to-date basis. The token currently changes hands at $0.5966, having collapsed underneath the crucial $0.60 support level.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
