Top Reasons Why XRP Price is Down Today

XRP price is in a strong sell-off, continuing a trend that started in September when it peaked at $1.6535. It has dropped in the last six consecutive weeks and is now hovering around its lowest level since August. This article highlights some of the top reasons why Ripple is going down today.

XRP Price is Going Down as the Crypto Fear and Greed Index Falls

Ripple token is in a steep freefall as investors remain fearful about the crypto industry. One of the main signs for this is the fact that the Crypto Fear and Greed Index has slumped to the fear zone of 27. It has been in a strong sell-off after peaking at 81 a few months ago.

The falling Fear and Greed Index has coincided with the retreat of Bitcoin and other altcoins. After hitting $87,400 in October, Bitcoin has dropped to below $74,000 today. The market capitalization of all coins has dropped from nearly $3 trillion to $2.47 trillion today. 

The fear has accelerated after last week’s midterm elections, in which Americans decided to vote for Democrats in a wide margin. Democrats were able to break the red wall that has existed in states like Texas and Mississippi. They will now control the House of Representatives and the Senate and have subpoena power. 

Unlike Republicans, Democrats are relatively opposed to the crypto industry. A good example of this is Senator Elizabeth Warren, who will chair the powerful Senate Banking Committee. 

Ripple is Falling as ETF Inflows Fade

Meanwhile, there are signs that demand for XRP ETFs has dropped sharply this year. SoSoValue data shows that spot XRP ETFs have not had any inflows this month. Instead, they have had outflows of $529k. 

The funds added $18.8 million in assets last month and $121 million in September. These trends show that demand for XRP ETFs are falling. On the positive side, XRP funds have done better than those of other coins. Bitcoin ETFs have had over $1 billion in outflows this month, while Ethereum ETFs have shed over $350 million. 

Falling ETF outflows is usually a sign that demand for an asset among American retail and institutional investors is waning. In most cases, coins tend to do underperform the market when ETF demand is falling. 

Rising Liquidations and Falling Open Interest

XRP price has also fallen because of rising bullish liquidations. Data shows that bullish liquidations soared to $30.3 million on Sunday, the highest level since October 8. A bullish liquidation happens when exchanges close leveraged positions to avoid big losses. As the chart below shows, bullish liquidations have been more than short liquidations in the past few months. 

These liquidations normally leads to more selling pressure of an asset since investors are usually forced to sell. This trend has also coincided with the ongoing retreat of futures open interest, a sign that demand for XRP in the futures market is fading.

XRP is Facing Technical Pressures

XRP price chart | Source: TradingView

The weekly chart shows that the XRP price has been in a strong sell-off this year. It has already dropped below the important support level of $1.2520, its lowest level on September 14. 

XRP has consistently remained below the 50-week Exponential Moving Average (EMA), a sign that bears remain in control. The coin has dropped to the 78.6% Fibonacci Retracement level. 

Therefore, the token will likely continue falling, potentially to the key support level of $0.9783, its lowest level in September. This view will be confirmed if it drops below the important support of $1.

This article provides market information, not financial advice. Cryptocurrency prices can fluctuate sharply, and technical forecasts do not guarantee returns. Readers should conduct independent research and consult a qualified financial professional before making investment decisions.