The prime factor that propelled the short price surge of XRP was the alleged news regarding its inclusion in a strategic reserve however these rumors were never confirmed.
As a result, on January 18 XRP lost 7.25 percent and was traded at $3.05, this drop was caused by the rumor regarding Donald Trump’s efforts to keep XRP in a reserve fund which was circulating profusely on the internet despite the fact that there was no political confirmation for it.

On another note, earlier this week, the price of trading of XRP soared by 45 percent in light of the rumors which stated ‘the time is ok as Trump is getting inaugurated now’.
The huge boom served around 3 dollars and 55 cents however this huge increase in price was uncalled for and seemed dubious as it was based on rumors.
On January 16, New York post alleged that the new order meant for the US would include XPR into reserve as a form of crypto and this was further substantiated by the Trump administration paving a way promising to create an America-first order of strategic reserve.
All the speculations regarding the reserve and inclusion of XRP shattered when it became evident there were no credible news to backup these discussions which in turn decreased the price graph of XRP and at one point plummeted to 3.40 cents before losing around 10 percent to 7.25 percent.
The political conflict revolving in the backdrop regarding donations made to Kamala Harris further caused tension and overshadowed all potential rumors regarding xrp.
Whereas these assumptions formed and were anticipated by some of the shingles of Ripple after Alderoty the chief legal officer on Ripple thoroughly bashed these claims as underhanded propaganda.

Massive liquidations in the derivatives market appeared with XRP’s price drop. Data from Coinglass shows how long XRP positions amounting to over $17.22 million were liquidated in the last 24 hours while short position liquidations stood at $5.56 million.
When traders are liquidated from long XRP positions, they are compulsorily required to sell which results in an IPO making the price drop further. This was the case in December as well when there was a long liquidation of $72 million with an accompanying 23% drop in the price of xrp.
XRP may sustain a further drop of 30% as per today’s decline. Moreover, paired with a relative strength index (rsi) drop, a twist in bearish divergence is quite a strong possibility, making a price surge difficult.
XRP’s price is moving above x2.28, which is the 50 day moving average trend, however correcting to this level should not be surprising since xrp traders would want to cash in profits and make sure the market conditions are stable.
Considering the price correction back in 2018 when there was a bearish divergence, something similar took place alongside XRP’s price in the recent past, an 80% cut.
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