Ripple(XRP) Finally Suffers Major Price Drop as Crypto Market Wipes Out $12B

The intense downtrend of the crypto market is finally having a toll on the best performing digital asset of the month.

Ripple (XRP), now the second most valuable cryptocurrency in the market, is no longer up in value on a monthly basis. Throughout the past 30 days, XRP has maintained the $0.5 level relatively well with minimized losses even during a period in which the price of BTC and other major cryptocurrencies fell by around 10 to 20 percent.

What Caused XRP to Drop?

As a liquidity network that provides major banks and financial institutions the ability to move cross-border payments with low fees, a large supply of XRP is crucial for the Ripple blockchain network to operate.

Similar to EOS, which implemented several controversial rules on its protocol to disallow investors from holding onto EOS for an extended period of time without using it, XRP needs to have a certain amount of XRP in circulation to guarantee seamless transactions for financial institutions.

In 2017, Ripple Labs CEO Brad Garlinghouse explained that XRP is placed in an escrow account and is distributed by Ripple Distribution to the public.

“The recently launched Escrow feature in XRP Ledger allows parties to secure XRP for an allotted amount of time or until specific conditions are met. For example, Escrow allows a sender of XRP to put conditions on exactly when a payment can be completed, so the payment remains cryptographically locked until the due date,” Garlinghouse said.

This week, around $16 million worth of XRP was moved from the Ripple Distribution wallet to an unknown wallet, injecting more XRP into the market.

If the supply of an asset is increased artificially and the demand from investors in the market remains the same, then it negatively impacts the value of the asset in public markets.

Over the past 12 hours, the price of XRP fell from $0.48 to $4.17 at its daily low. XRP recovered from $4.17 to $0.43, recording a daily loss against the US dollar of around 10 percent.

It is possible, given that XRP has been relatively successful in defending the $0.4 support level, that the unforeseen increase of the supply of XRP in circulation affected the short-term price trend of XRP.

What’s Happened to Bitcoin

Bitcoin has dropped quite substantially from its $6,000 support level, by more than 35 percent in the past seven days. But, the bottom is said to be in the $3,500 to $4,200 range, and BTC is expected to drop by over 80 percent in the short-term before entering a consolidation phase.

“Not convinced that we’ve hit the bottom yet. Check out the sell volume so far. If this was capitulation there would be a dramatic high volume sell off. In my opinion, the worst hasn’t come yet, but I’m preparing myself for both scenarios. Lose the bull versus bear mentality,” one cryptocurrency technical analyst said.

The volume of BTC has increased by around $3 billion in the past several days, suggesting that an intense sell-off from bears occurred and that BTC did not free fall without any sell pressure.

Author: Joseph Young
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Tether Implodes in 4% Drop = An Important Step Toward Crypto Market Growth

The price of Tether (USDT), a crypto stablecoin backed by the US dollar pegged to $1, has fallen by around 4 percent in the past 24 hours to $0.96.

As USDT fell, it became more expensive for traders to purchase major cryptocurrencies like Bitcoin and Ethereum with USDT, pushing the premium of cryptocurrencies up on crypto-only exchanges like OKEx and Huobi.

At its peak, the price of Bitcoin achieved $7,500 on Bitfinex, as CCN reported on Monday.

Why Tether Sell-Off Could be Better For Crypto

Ostensibly, In the short-term, the sell-off and instability of USDT may seem beneficial for the crypto market due to the increase in the price of most cryptocurrencies but in reality, it really is not.

Bitcoin achieved $7,500 on Bitfinex but the inflated price of BTC by USDT is of less significance to the global cryptocurrency exchange market. It can be argued that the decline of USDT portrayed lack of maturity and strong infrastructure in the market, which could push away institutional investors such as pensions and academic funds that are interested to commit to the asset class.

In the long-term however, the decline of Tether could positively affect the crypto market as it will lead traders to regulated, audited, and transparent alternatives like Gemini Dollar (GUSD), Paxos (PAX), and TrueUSD (TUSD).

Already, the price of TUSD has increased to $1.08, by more than 8 percent, and has risen quite substantially against USDT on Binance, which suggests that traders have started to favor newly emerging stablecoins that have the backing of banks and authorities.

“Bitcoinland: where a simple filthy statist buck is ‘worth’ $1.08 on an exchange… because reasons. Ff you are wondering what this means: there are two ‘synthetic dollars’ being traded against one another here: TrueUSD and Tether the fact that they aren’t trading at $1.00 is because someone (Bitfinex, owner of Tether Ltd) is having bank account / liquidity problems,” Post Oak Labs founder Tim Swanson said.

Since 2014, Tether has provided cryptocurrency-only exchanges an alternative to the US dollar with which traders can hedge their positions to the stability of the US dollar. Prior to 2018, there were no alternatives to USDT, forcing the industry to depend on USDT as a widely accepted stablecoin.

But, as cryptocurrency analyst and trader Alex Kruger told CCN in an exclusive interview, Tether’s lack of transparency and opaque operations poses serious issues for traders. For instance, at this point, it remains unclear whether traders can redeem USDT at a 1:1 ratio to the US dollar, due to the collapse of Noble Bank, Tether’s partner bank.

“Both Gemini and Circle are US based regulated issuers and thus perceived as more trustworthy, carrying lower credit risk. One should expect a great percentage of all USDT (Tether) holdings to migrate to GUSD (Gemini) and USDC (Circle),” Krüger said.

What’s Next?

Bitfinex has clarified that it has obtained the approval of its bank to enable fiat deposits and withdrawals in the next 24 hours. It is possible that the statement of Bitfinex could lead to the stabilization of USDT.

Author: Joseph Young
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Bitcoin and Altcoins Could Target Additional Weakness

Bitcoin price failed to stay above the key USD 6,500 pivot level. As a result, BTC/USD started a sharp downward move and tumbled below the USD 6,450 and USD 6,400 support levels. Major altcoins also followed bitcoin and declined sharply between 6%-12%. Ethereum is down more than 10% and is currently (UTC 06:40 AM) struggling to hold the USD 200 support. Ripple and bitcoin cash also fell significantly and moved further into a bearish zone. The market turned red and it seems like there could be more losses in the coming sessions.

Bitcoin price
After a continuous failure to move above the USD 6,700 and USD 6,800 resistances, bitcoin price started a downward move. BTC/USD dropped more than 5% and broke the key USD 6,400 support. The price traded towards the USD 6,250 support, which held losses.
Buyers are currently fighting to protect more losses below USD 6,250. However, if sellers remain in action, there is a risk of more losses below the USD 6,250 support. The next major support awaits near the USD 6,100 – USD 6,110 zone.

Ethereum price
Ethereum price also followed bitcoin and declined heavily after it broke the USD 215 support. ETH/USD is down more than 10% and it recently spiked below the USD 200 support.
The price is currently consolidating losses around the USD 200 level. An initial resistance is near USD 205, above which the price may perhaps recover towards the USD 215 resistance (the previous support).

Bitcoin cash and ripple price
Bitcoin cash price dropped significantly after sellers cleared the USD 500 support. BCH/USD is down more than 12% and it remains at a risk of more losses towards the USD 440 and USD 420 levels. On the upside, resistances are visible around the USD 470 and USD 485 levels.
Ripple price dropped close to the USD 0.400 support. XRP/USD seems to be under a lot of bearish pressure and if sellers break USD 0.4000, the price could tumble towards the USD 0.350 support.

Other altcoins market today
Many altcoins dropped sharply and are down more than 10%, including DCN, THETA, NAS, NANO, CMT, WAN, MIOTA, XLM, XEM, DROP, AION, WTC and PPT.
The crypto market clearly moved into the red zone and if bitcoin fails to stay above the important USD 6,250 support, there could be nasty downsides. To recover, BTC/USD needs to move back above the USD 6,400 and USD 6,500 resistance levels. Similarly, a daily close below the USD 200 support may increase selling pressure on ETH/USD in the coming sessions.

Author: Aayush Jindal
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