XRP has seen a substantial drop of more than 45% from its price of $0.93 in July. A new report from Kaiko sheds light on the underlying cause of this extended bearish trend.
In July of this year, XRP hit what has been its highest point this year, trading at $0.93. This price increase came after the court ruled in favor of Ripple in July, declaring XRP as a non-security. XRP had the attention of everyone in the market and enjoyed a massive surge. However, this bullish trend was short-lived.
According to the Kaiko report, this drop in value can be partially attributed to substantial sell-offs on Upbit, OKX, and Binance, as highlighted in Kaiko’s report. The analysis in the report points out that the value of XRP faced a rapid decline of over 25% in a short period after the increase.
The Aftermath
August proved to be a challenging month and XRP was being outperformed by its altcoin peers. The data from the report shows that XRP’s performance in August lagged behind the top five altcoins by market cap except Ethereum (ETH), the second-largest cryptocurrency by market cap.
In August, XRP suffered a 17% drop against the flagship crypto Bitcoin (BTC). This was far from the 54% rise in July and caused some uncertainty among traders with many taking their profits. Ripple has been hovering around $0.5 for a while now with little activity. This is a significant drop of over 46% from its peak in July.
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The Cause of XRP’s Downturn
As aforementioned, Kaiko conducted an in-depth analysis of various metrics to find the reason for this big drop in XRP’s value. Among these is the sell volume from multiple exchanges.
There was notable selling pressure on Upbit, the largest exchange in Korea, and OKX. Upbit alone accounted for 55% of XRP sell orders, being the highest among all the mainstream exchanges in August.
Kraken also had a significant amount of sell orders. Binance, the world’s largest crypto exchange, experienced a high number of sell orders, but it had more buy orders. Coinbase also saw a surge in buy orders. However, it’s essential to note that Coinbase’s XRP volume is significantly lower than that of Binance and Upbit.
XRP’s average trade size on Coinbase also surpassed the top ten altcoins. This shows a strong buying interest among traders in the U.S. Kaiko suggests that the increase in interest matches up with the investors regaining access to XRP after the court ruling in July.
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