Ripple Breaks Below $2 As Post-Election Optimism Fades: Retail Stays Bearish

The rally in XRP ($XRP), the native token of the XRP Ledger created by Ripple as a payment system in 2012, is cooling off. The crypto was tumbling for a second straight session.

After trading around the $0.50 level for much of the year, XRP broke above a broad trading range following the Nov. 5 U.S. presidential election. On Nov. 16, it breached the $1 mark for the first time in about three years. It took another 15 sessions to go past the $2 mark. 

XRP touched an intraday high of $2.6409 on Dec. 8, marking the highest since Jan. 8, 2018, before giving back some of the gains.

XRP chart courtesy of TradingView

The post-election strength is attributable to the optimism that the incoming administration under President-elect Donald Trump would be crypto-friendly. XRP traders also reacted positively to Trump’s nomination of crypto advocate Paul Atkins as the SEC Chair

The move cheered traders, especially those betting on XRP, as the current SEC Chair Gary Gensler had gone after Ripple Labs, XRP's parent company. The SEC sued Ripple in 2020, alleging that the latter’s sale of XRP constituted an offering of unregulated securities. Several cryptocurrency exchanges, including Coinbase and Kraken, delisted XRP after the lawsuit. 

In the final judgment issued in August, a judge ruled that XRP was not a security, but Ripple was still asked to pay $125 million in fines. 

Thanks to the recent rally, it is now the fourth-largest crypto in market capitalization. 

On Dec. 8, Ripple CEO Brad Garlinghouse appeared on CBS News’ “60 Minutes,” and the executive touted it as an indication that digital currencies are becoming more and more mainstream. He, however, took exception to the media outlet failing to clarify that the Federal judge had ruled that XRP is not a security.

On Monday, XRP slumped about 15% before settling at $2.2190. The sell-off has extended into Tuesday’s session. At 1:23 p.m. ET, XRP was down 17.21% at $1.9909. 

The weakness could be partly attributable to the breathtaking rally after the election. That said, the downside could be cushioned by expectations of Trump’s patronage, especially for U.S.-issued cryptos. 

It could also receive support from the potential approval of spot XRP exchange-traded funds following sponsors such as WisdomTree, Bitwise and Canary Capital filing for proposals for the same. 

 The token’s all-time high is $3.841, hit on Jan. 4, 2018. 

XRP was among the top 15 trending tickers on Stocktwits and was the most active financial asset on the platform.

XRP sentiment and message volume December 10, 2024, as of 1:23 pm ET | Source: Stocktwits

On Stocktwits, sentiment toward XRP has remained ‘bearish’ (38/100), with message volume remaining ‘low.’

A Stocktwits user surmised that big money may have had a hand in XRP’s recent sell-off. 

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