Why is XRP price crashing as the Ripple ETF inflows soar?
XRP price has tanked for three consecutive days, erasing the gains made earlier this week, even as the recently launched ETFs gained momentum.
- XRP price suffered a harsh reversal as the recent rally stalled.
- Spot XRP ETFs continued seeing strong inflows this week.
- Technical analysis suggests that the token has more downside.
Ripple (XRP) token dropped to $2.03 today, Dec. 6, down by over 44% from its highest point this year. This crash has shed billions of dollars in value, a move that has brought its market cap to $120 billion.
XRP price has dropped even as its key fundamentals have strengthened. One of them is that investors have continued piling into its recently launched ETFs.
Data compiled by SoSoValue shows that the funds have never had a day of outflows. They added $10.2 million in assets on Friday, bringing the weekly gain to $230 million.
Consequently, these XRP ETFs have now had over $897 million in inflows, with Canary’s XRPC leading the charge with over $363 million. Grayscale’s GXRP, Bitwise’s XRP, and Franklin Templeton’s XRPZ have attracted $211 million, $187 million, and $134 million in inflows, respectively.
The four ETFs now hold over $861 million in assets under management. With the REX-Osprey ETF included, these funds now hold over $972 million in assets.
Therefore, the XRP price has dropped because of the ongoing sentiment in the crypto market, which is deteriorating. Bitcoin and other altcoins have erased most of the gains made earlier this week as futures open interest drops and liquidations rise. XRP positions worth over $7.6 million were liquidated in the last 24 hours, leading to more selling pressure.
XRP price technicals explain the crash
Technical analysis also explains the ongoing XRP price crash as it started when it retested the upper side of the descending trendline. This trendline was the upper side of the falling wedge pattern, a common bullish reversal sign in technical analysis.
XRP price has remained below the 50-day and 100-day Exponential Moving Averages. It also remained below the Supertrend indicator, meaning that it remained in a bear market despite the recent rebound.
Therefore, the token will likely continue falling as sellers target the key support level at $1.8520. This is an important price where the token has failed to move below in the past few months. A drop below that support will point to more downside.
