XRP Experiences Significant Price Decline Amid Market Turbulence
On Thursday, February 19, XRP witnessed a notable price decline, shedding over $5 billion in market capitalization within a short 24-hour period. This drop reflects a broader trend of market weakness impacting the cryptocurrency sector.
Market Capitalization Takes a Hit
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According to data from CoinMarketCap, XRP’s market value decreased sharply from $90.49 billion on February 18 to $84.88 billion by the following day. This significant $5.61 billion contraction highlights XRP’s status as the largest daily loser among the top 20 cryptocurrencies, with a 4.55% decline intensifying its bearish short-term outlook.
Pressure in the Derivatives Market
The market’s pressure was further evident as XRP funding rates plummeted by approximately 80%, signaling persistent challenges in the derivatives sector. Concurrently, a 5.35% reduction in open interest emerged, indicating that market participants are positioning for a potential continued decline.
XRP Drops Below Critical Support Levels
The selling pressure intensified as XRP fell below its daily pivot of $1.44. The price remained constrained under the 7-day simple moving average (SMA) of $1.45 and the 30-day average near $1.62, indicating a challenging environment for the cryptocurrency.
Furthermore, the relative strength index (RSI) slipped to 39.02, approaching oversold conditions, while 24-hour trading volume increased by nearly 4%. This suggests that the decline was primarily driven by active selling rather than a lack of liquidity.
Broader Market Context and Future Outlook
The broader cryptocurrency market also faced challenges, with total market capitalization declining by approximately 1.9% during the session. Bitcoin (BTC), for instance, experienced a similar 1.9% drop, exacerbating the market’s downward trend. In such an environment, XRP’s steeper decline underscores the overall market sentiment.
Traders and analysts are closely monitoring for signs of selling exhaustion to determine potential shifts in sentiment. A stabilization of Bitcoin above the $65,000 mark could offer support to alternative cryptocurrencies, including XRP.
For XRP to reverse its current trajectory, a consistent close above $1.44, coupled with increased trading volume, would be necessary to indicate that the recent bearish move was temporary. Until such signals emerge, attention remains on the $1.35 support level as a crucial area to watch.
