XRP, Ripple's digital asset, has lost more than 20% of its value over the past month. This article examines the factors affecting this cryptocurrency.
Ripple Faces Legal and Regulatory Challenges
Despite a recent victory over the SEC, Ripple's legal situation remains a major hurdle for XRP. Open since the end of 2020, this issue continues to weigh heavily on the cryptocurrency. Institutional investors are hesitant to commit amid ongoing uncertainty. Since the start of the year, XRP's price has dropped by 35%, while Bitcoin has seen an increase of over 50%.
Market Disinterest in XRP
XRP suffers from declining on-chain activity. Daily trading volumes have dropped to 500 million dollars, down from previous peaks of 1.2 billion. This accompanies a reduction in active addresses holding more than 10 million tokens. Unlike Ethereum or Solana, which promote dynamic sectors, Ripple remains focused on interbank transfers, limiting its appeal for new projects.
Capital Flight and Lack of Catalysts
The crypto market frequently experiences capital rotations. Currently, XRP finds itself at the bottom of the pack. No major events support its recovery or community revival. XRP is now trading around $2.04, far from its annual high of $3.40. Its market capitalization has dropped below $115 billion, placing XRP in the 7th position globally.
Despite current challenges, XRP's future relies on resolving Ripple's legal battles and attracting new investors.
