According to CoinShares’ Digital Asset Fund Flow Report, XRP funds have seen an increase in capital inflows from institutional investors over the past week. The SEC lawsuit and the unlocking of 1 billion tokens are also important factors driving the altcoin market. XRP rose nearly 2% on Monday, trading at $0.5430.
Ripple (XRP) price on Monday was influenced by the token unlocking on October 1st, XRP capital flows, and the sentiment of crypto market participants. XRP rose nearly 2% on the day, with the altcoin trading above key support at $0.5200.
Daily Digest Market Movers: Capital inflows into XRP funds increase
The CoinShares Digital Asset Flow Report shows that XRP-based funds received $300,000 in capital inflows last week. During the same period, the two largest assets by market capitalization recorded negative flows. Bitcoin recorded outflows of $159 million, and Ethereum funds recorded losses of $28.9 million.
Fund flow by asset
Increased capital inflows into XRP indicate institutional demand. XRP traders are closely watching developments in the Securities and Exchange Commission’s (SEC) lawsuit against payment remittance companies. The SEC has appealed a final ruling that fined Ripple $125 million for institutional sales of XRP tokens. Another factor impacting the asset is the unlocking of 1 billion XRP tokens, which is part of the planned token release by the payment company. If a large amount of XRP tokens are released with each unlock, it will have a negative impact on the price of the asset.
Technical analysis: XRP could widen losses by another 7%
Ripple hit a high of $0.9380 in July 2023, starting a multi-month downward trend. The altcoin could widen losses by 7% and wipe out liquidity at XRP’s key support level at $0.5026. This level coincides with the September 6th low.
The red histogram bar of the Moving Average Convergence Divergence (MACD) indicator indicates potential negative momentum in the XRP price.
XRP/USDT daily chart
The bearish theory may be invalidated if the daily candlestick closes above the 200-day exponential moving average of $0.5548. XRP may then attempt to recover to $0.6000, the October 2 high and a psychologically important price level for altcoins.
Frequently asked questions about Bitcoin, altcoins, and stablecoins
Bitcoin is the largest cryptocurrency by market capitalization and is a virtual currency designed to function as money. This form of payment is not controlled by any particular person, group, or entity and eliminates the need for third parties to participate during financial transactions.
An altcoin is any cryptocurrency other than Bitcoin, but some consider Ethereum to be a non-altcoin because it is these two cryptocurrencies that forks occur. If this is true, Litecoin would be the first altcoin to fork from the Bitcoin protocol and thus be an “improved” version of it.
A stablecoin is a cryptocurrency that is designed to have a stable price, and its value is backed by the reserves of the asset it represents. To achieve this, the value of a stablecoin is pegged to a commodity or financial instrument, such as the US dollar (USD), and its supply is regulated by an algorithm or demand. The main purpose of stablecoins is to provide an on/off ramp for investors who wish to trade and invest in cryptocurrencies. Also, since cryptocurrencies are generally volatile, stablecoins allow investors to store value.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the market capitalization of all cryptocurrencies combined. This clearly shows the interest in Bitcoin among investors. BTC’s dominance typically occurs around bull markets, where investors turn to relatively stable, high-market-cap cryptocurrencies like Bitcoin. Decreasing BTC dominance usually means investors are moving their capital and profits to altcoins in search of higher returns, which usually causes an explosive rally in altcoins.
