Ever since its launch in 2013, the xrp price usd has witnessed sharp fluctuations. It hit an all-time high of $3.84 on Jan 4, 2018, with a market cap of over $147 billion, as per CoinMarketCap #CMC257. It now stands at $0.52 as of Oct 2023. The overall drawdown is 86.5%, which is far worse than the 55% retracement that Bitcoin witnessed during the same period. Legal developments were the most important turning point: After the US SEC lawsuit against Ripple in Dec 2020, the xrp price usd fell by 58% to $0.21 within a day, and the delisting wave on exchanges caused 73% of liquidity to evaporate. After the court held in July 2023 that “XRP is not a security”, its price surged by 75% to $0.82 within three hours. However, the threat of an SEC appeal made it difficult for it to break through the resistance line of $0.55, and it still dropped by 84.6% from its peak.
The market cycle is highly correlated with Bitcoin (the median 30-day correlation coefficient is 0.72). In the 2017 bull market, the xrp price usd increased 36,000% per year (0.006 to 2.40 US dollars), but in the Federal Reserve interest rate hike cycle in 2022, the decline was 63% (Bitcoin was -65% during the same period). On-chain metrics also show that Whale Address (>10 million XRP) controlled 81% of liquidity at its peak in 2018 but dropped to 38% in 2023. Diversification of holdings made price volatility (annualized) decrease from 182% to 68% (Santiment #SANAPI).
The tech upgrade makes a huge difference. After the introduction of the NFT functionality in XRP Ledger in 2021, active addresses on the chain increased by 48% within weeks, but the xrp price usd only increased by 23%. In September 2023, the AMM pool was introduced, which took the locked value (TVL) to 52 million US dollars, but it was only 0.2% of the outstanding market capitalization and was not able to halt the falling trend in price. Regulatory policy divergence fuels volatility: In 2017, Japan legalized XRP as a payment instrument, which pushed its share of worldwide transaction volume to 34% (peak). In 2023, the UK’s FCA classified XRP as a “high-risk asset”, and trading volume on UK exchanges shrank by 62%.
The macroeconomic shock was clear. When the COVID-19 pandemic triggered the market collapse in March 2020, the xrp price usd plunged 51% to $0.15 in one day, and the volatility hit 287%. During the Russia-Ukraine war in 2022, thanks to Ripple’s collaboration with the Central Bank of Ukraine for testing cross-border payments, its price went up by 19% against the trend (while Bitcoin fell by 12% in the same time). The double-edged sword effect of enterprise cooperation: During Ripple’s cooperation with MoneyGram in 2019, the xrp price usd had increased by 98%, but fell by 44% after the termination of cooperation in 2021.
The cost distribution for long-term holders indicates that 58% of XRP holdings currently have a cost above $0.55 (IntoTheBlock #ITB2023), generating ongoing selling pressure. The Bloomberg model foresees that in the event of complete resolution of the SEC lawsuit (with a 42% probability), the xrp price usd can move back to the $1.20-$1.50. In the event of losing the lawsuit, it will drop to $0.30 (technical support level) with a 42.3% decrease in the current price, as per BLOOMBERG Crypto Report #2023Q4.