Leading cryptocurrency XRP has plunged 4% on Thursday, falling from a daily high of $1.34 to a low of $1.27. It is now trading below its important support level of $1.30, and risks slipping further south. The development is making traders fear taking an entry position now, as the altcoin is on a slippery slope. Buying the token now could increase the chances of losses as the entire cryptocurrency market has turned red.
Also Read: XRP Could Be In For A Major Price Dip: Here’s Why
Reasons For the XRP Plunge
Bitcoin fell 4% in the day’s trade, hitting $72,000, while Ethereum dipped 5%, falling to the $1,975 level. ETH at the $1,900 level puts the crypto in a dangerous position to head south. Rising oil prices, no resolution in the US-Iran war, and the Strait of Hormuz remaining closed are among the reasons markets are affected. XRP is also caught in the crosshairs of this uncertainty and is moving in tandem with Bitcoin’s decline.
The markets turned fearful after the investment bank Piper Sandler wrote in a note to clients that the Strait of Hormuz could remain closed for months and oil prices could hit new highs. The warning came after the US conducted “self-defense” strikes in Southern Iran on late Wednesday. Therefore, XRP and the broader cryptocurrency market could face hardships this week due to the global developments.
The tensions are already showing up on Thursday as Asian markets remain in the red. Japan’s Nikkei fell 332 points, while Hong Kong’s Hang Seng plunged 330 points. The US markets could also be affected on Thursday’s opening bell. All of these add to the reasons on why XRP is heading south.
In addition, the latest data shows that ETF inflows into XRP have slowed down in May. Even Bitcoin faced a $700 million ETF outflow this month, which led to its price turning volatile. Institutional clients are rethinking their investment strategy in the market due to the ongoing crisis. If the funds from these corporate giants stall, the broader cryptocurrency market could suffer.