Published on juli 6, 2024, 12:44 am
Image source: Fox News
```json { "TLDR": "XRP's price dropped by over 12% to $0.381 due to Bitcoin selloffs and SEC's $2 billion penalty reminder; German government and Mt. Gox returns of Bitcoins added to the decline. XRP, Ether, and BNB affected as they are closely correlated with Bitcoin. SEC's rejection of Ripple's penalty reconsideration request led to a 20% decline. Long liquidations in derivatives market intensifying the downturn." } ```
XRP’s recent price decline, dropping by over 12% to $0.381 on July 5th, has sent ripples through the crypto market realm. This descent is closely linked to significant Bitcoin selloffs and the U.S. Securities and Exchange Commission’s (SEC) reminder of Ripple facing a hefty $2 billion penalty demand.
The trigger for XRP’s decline seems to stem from reports of the German government selling off hundreds of millions of dollars in seized Bitcoins while holding onto around $2.4 billion in cryptocurrencies. Additionally, the return of over 140,000 Bitcoins from the now-defunct Mt. Gox exchange has spurred discussions on the potential sale of part of the remaining $8 billion worth of Bitcoin.
This downturn is influencing smaller coins like XRP, Ether, and BNB due to their strong correlation with Bitcoin. For example, XRP’s high correlation coefficient with BTC indicates that traders may be liquidating altcoins to offset losses in the Bitcoin market.
Moreover, XRP’s plummet today can also be attributed to the SEC’s recent filing rejecting Ripple’s request to reconsider the staggering $2 billion penalty imposed on it despite a legal setback against Binance earlier on.
The uncertainty looming over XRP due to the SEC’s firm stance on the penalty demand has fueled a 20% decline post-filing. Furthermore, massive long liquidations in its derivatives market are intensifying this downward spiral.
As long positions are being liquidated, bullish traders are compelled to sell off their positions, exerting additional downward pressure on prices and hastening the decline. The drop in open interest and funding rates further exemplifies traders unwinding their positions and displaying increased caution within the XRP community.
Ultimately, these developments underscore a volatile time within the cryptocurrency space where each move involves risk. It is imperative for investors and traders alike to conduct thorough research before making any financial decisions in this ever-evolving landscape.
Original article posted by Fox News
