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XRP, the native token of the XRP Ledger developed by Ripple, has experienced a significant downturn, falling to $2.1533 and moving below its 50-day moving average. This marks a drop of over 36% from its highest point this year, reflecting the broader bearish sentiment in the cryptocurrency market.

Factors Behind the XRP Price Drop

The price of XRP has declined for three consecutive days, hitting its lowest level since May 8. The ongoing market sell-off has resulted in substantial losses, particularly for leveraged traders. One notable example is a whale trader who has reported an unrealized loss of $2.6 million as the crash deepened.

The trader opened the position at $2.3715 using 3x leverage, and liquidation will occur if XRP’s price drops to $1.3949—a 35% decline from the current level.

Additionally, the trader holds long positions in other cryptocurrencies such as Ethereum (ETH), Solana (SOL), Hyperliquid (HYPE), Cardano (ADA), and Cosmos (ATOM). All of these positions have also incurred significant unrealized losses, with the trader’s weekly unrealized losses exceeding $8.4 million.

Broader Market Context

The decline in XRP’s price is part of a larger crypto market crash. Bitcoin, for example, fell from a recent high of $111,900 to below $104,000 on Friday. Market sentiment was further impacted by geopolitical and economic developments, including a tariff threat from Donald Trump on European goods. Although the immediate risk was averted with an extension of the tariff deadline, ongoing trade tensions between the US and China have reignited concerns.

Scott Bessent, a well-known investor, noted that trade talks between the US and China have stalled. He suggested that only a meeting between Donald Trump and Xi Jinping could provide a resolution to the current crisis.

Historically, June has been one of the worst-performing months for cryptocurrencies, and traders are positioning themselves accordingly. This seasonal trend has added to the downward pressure on XRP and other digital assets.

XRP Price Analysis: Key Levels to Watch

Technical analysis suggests that XRP remains in a bearish trend. The daily chart indicates that the token has moved below its 50-day moving average, a critical indicator of market sentiment. The MACD indicator is also dropping and is on the verge of moving below the zero line, signaling increasing bearish momentum. Additionally, the Money Flow Index (MFI) is pointing downward, indicating reduced buying pressure.

For the whale trader in question, a critical level to watch is $1.3949, which would trigger liquidation. Other key support levels include $2, a psychological barrier that aligns with an ascending trendline, and $1.6129, the lowest swing level recorded on April 7. If XRP breaks below these levels, the risk of further declines intensifies.

Takeaway for Investors

The recent price action of XRP underscores the importance of risk management, especially for leveraged traders. Here are some key tips for navigating the volatile cryptocurrency market:

  • Set Stop-Loss Orders: Always have a clear exit strategy to minimize potential losses.
  • Diversify Your Portfolio: Avoid overexposure to a single asset to reduce risk.
  • Monitor Market Conditions: Stay informed about macroeconomic factors and market trends that may impact cryptocurrency prices.
  • Understand Leverage Risks: While leverage can amplify gains, it also increases potential losses significantly.

As market conditions remain volatile, traders and investors should exercise caution and make informed decisions. Staying updated on price movements and key levels can help mitigate risks in this unpredictable environment.

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