YEREVAN (CoinChapter.com) — XRP price is down today, trading at just under $0.50 on Jan. 23 after falling 8% in the last 48 hours. Additionally, the token dropped below significant support, hinting at more trouble ahead.
Meanwhile, the reasons behind the decline are noteworthy. So why is XRP down today? Let’s see.
Why is XRP Down Today? Blame the Bitcoin Plunge
Today, the crypto market printed red candles following Bitcoin’s (BTC) lead. This drop was possibly due to the market’s “sell-the-news” reaction to the spot bitcoin ETF approvals and a ripple effect from the FTX bankruptcy-related asset liquidations.
In detail, on Jan 22, Grayscale transferred over $600 million in Bitcoin to Coinbase, raising their total holdings on the platform to more than $2 billion. Concurrently, FTX’s bankruptcy administrators completed the sale of their entire holding of 22 million Grayscale stock GBTC shares, which was valued at close to $1 billion. This extensive selling activity contributed to downward pressure on prices.
However, XRP scored $0.5 million inflows in the week ending Jan. 21, and XRP monthly inflows reached $3.6 million. Albeit small, the inflows could be a win for the altcoin considering the large outflows from Bitcoin and Ethereum.
Number of XRP Whales Drops Fast
The number of XRP whales has plummeted since early October. As a result, XRP addresses with a balance greater than $1 million and $10 million reached their yearly lows parallel to the price correction.
Generally, a low whale count signals large investors’ declining confidence in an asset’s returns. Also, since retailers tend to follow the whales, large investors could sway the market in their chosen direction. Thus, the charts above paint a negative outlook for the coin.
XRP whales play an important role, and they might drop the token’s price further if the exodus continues. The mentioned headwinds are why XRP is down today. If the headwinds persist, XRP could drop further, following whale efforts.
XRP Technicals Still Point South
As CoinChapter has reported before, XRP traded within a formation named the ‘symmetrical triangle’ since July 2023. A symmetrical triangle forms when the price of an asset creates lower highs and higher lows, converging into a triangle.
This pattern indicates a period of consolidation before the price breaks out. It’s directionally neutral until a breakout occurs. The target is typically estimated by measuring the widest part of the triangle and projecting that distance from the breakout point.
Traders watch for high volume to confirm the breakout direction, either upward or downward, to predict the continuation or reversal of the current trend potentially. As mentioned, XRP broke below the triangle’s support, which has been relevant since November 2022.
If the XRP price closes the session below the support, a possible bearish price target for the coin could stand at $0.2, or 60% below the current value.
