As a seasoned researcher with over two decades of experience in the ever-evolving world of finance and technology, I find myself constantly intrigued by the dynamic nature of the cryptocurrency market. Today, my attention is drawn to XRP, a coin that has been making waves, or perhaps ripples, for quite some time now.
On October 22, XRP (XRP) was among the underperformers in the top cryptocurrencies, falling by 5.3% to hit a price of $0.53. Meanwhile, the overall crypto market saw a decrease of 3%.
As a crypto investor, I’m seeing several factors that seem to be pushing XRP prices down today. Firstly, the news about Ripple donating millions to the Kamala Harris campaign might be causing some uncertainty among investors. Secondly, there are growing market perceptions that the Federal Reserve in the U.S. may slow down on interest rate cuts, which could impact the overall crypto market positively or negatively. These factors combined appear to be driving the current price trend for XRP.
Ripple co-founder donates $10M in XRP to Harris
The fall in the value of XRP today aligns with the announcement that Ripple’s co-founder, Chris Larsen, gave a $10 million contribution in XRP towards Kamala Harris’s U.S. presidential campaign.
On October 21st, Larsen admitted to donating funds to Future Forward USA, a political action committee supporting the Democratic presidential nominee. This contribution came after Ripple had given $1 million to the same group back in August.
The donation sparked skepticism among XRP investors, with some speculating that Kamala Harris may liquidate the entire crypto contribution from Larsen, potentially impacting existing XRP holders.
For instance, an X user responded to Larsen’s announcement:
“The narrative “Ripple dumps XRP on holders” has now become “Kamala dumps XRP on holders”…. I absolutely respect your right to donate and vote for whomever you want – but the optics on this will not go over well with the XRP community.”
Some analysts further pointed out the anti-crypto stance taken by the Democrats.
To give an example, Chip, a co-creator of the crypto podcast “On The Chain,” pointed out that the majority of Democrats have yet to change their stance on cryptocurrency prior to the upcoming US elections. He suggested that Kamala Harris has not made significant declarations regarding cryptocurrency during her presidential campaign.
Currently, Senator Elizabeth Warren persists in expressing critical views on cryptocurrency, as evidenced by her debate with John Deaton which has gained significant attention.
Today’s decline in XRP’s price may have been caused by several factors combining together. These include apprehensions among investors about selling off large quantities, uncertainty regarding the Democratic Party’s position on cryptocurrency, and the donation aspect potentially playing a role as well.
Traders dial back aggressive rate-cut bets
The value of XRP may be impacted significantly by broader financial market trends, given that traders are expecting less frequent reductions in interest rates by the Federal Reserve, as suggested by the strong U.S. economy. This sentiment was echoed by Dallas Fed President Lorie Logan during her speech on October 11th.
Excerpts from the address:
“If the economy evolves as I currently expect, a strategy of gradually lowering the policy rate toward a more normal or neutral level can help manage the risks and achieve our goals.”
The comments occurred after the U.S. 10-year Treasury note yields experienced a significant rise, reaching their highest point in three months on October 22nd. This surge in yield rates led to a decrease in demand for non-earning assets such as cryptocurrencies like XRP within the market.
XRP unable to close above key MA resistances
The drop in XRP’s value today can be attributed to some technical factors, as it encounters selling activity near two crucial moving averages: the 50-day Moving Average (represented by the red line) and the 200-day Moving Average (the blue line). These resistance points are approximately at the $0.55 price level.
By October 22nd, the value of XRP was approaching the lower boundary (approximately $0.52) of its current ascending triangle chart as a possible support point. This could hint at an upcoming rise, potentially directing it towards the 50-day and 200-day Exponential Moving Averages by October.
If the price of XRP manages to surge above its moving averages, it could potentially trigger a rally that might lead to reaching the upper trendline of the triangle, approximately at $0.64 – similar to the growth spurts seen in July, August, and September.
Conversely, if the price of XRP closes decisively below the lower trendline of the triangle, it might push the price down towards the $0.50 mark, which is considered a significant level of support psychologically.
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2024-10-22 15:23