XRP Declines to $2.2, Why is the Price Down Today?

After surging exponentially last week, XRP has now cooled off, as its price has plummeted by almost 20% from its yearly high of $2.9 to $2.2 at the time of writing.

The Ripple-backed coin rocketed on the news of the resignation of current SEC chairman, Gary Gensler, and briefly secured the third spot on the crypto market list.

Even though its weekly chart still shows that the coin is 35% up, the momentum seems to have died down as the coin has traded in red for the last 48 hours.

XRP Plummets on News of New SEC Chairman

Donald Trump’s appointment of Paul Atkins as the new SEC chairman did not bode well for XRP. This outcome is strange especially because the XRP price has been suppressed by the ongoing court battle between Ripple and the SEC.

Bitcoin, on the other hand, soared significantly following the news. The flagship cryptocurrency surged to a new all-time high of almost $104,000 with other altcoins like Binance Coin (BNB), and Tron (TRX) mirroring the pattern.

Over the last 24 hours, XRP has declined by 5.21% to trade at $2.26. Notably, its one-day trading volume also plummeted by 44% to rest at $13.6 billion. As a result, XRP has dropped one position on the chart, positioning below USDT as the fourth most valuable cryptocurrency.

So, if Paul Atkins is a revered crypto advocate, why then is the XRP price dropping 48 hours after his announcement?

Why XRP Price is Down Today

It is important to note that XRP surged unprecedentedly by 400% in less than a month. This sharp increase is often met with price corrections after short-term investors aggressively cash out their profits.

XRP’s technical chart reflects that the coin entered the overbought territory after its RSI (relative strength index) flashed 91 this week. Hence, XRP is due for a period of retracement which would set the grounds for the next rally.

Another reason that could be attributed to the sudden decline in the XRP price is the “buy the rumor, sell the news” scenario. Before Trump announced Paul Atkins as SEC chair, the rumor had already circulated in the market which led to investors accumulating XRP, prompting the previous surge.

However, when the event finally happened, investors sold off their holdings to cash in on already-realized gains, leading to the current market crash.

Meanwhile, the global market is currently experiencing a correction. The total market valuation declined by 2.6% in the last 24 hours to rest at $3.58 trillion. Bitcoin also crashed as low as $93k before climbing back to its current price of $98k.