XRP Price Drops 16% Despite Bullish News, Market Manipulation Cited
2min read Software engineer and crypto enthusiast Vincent Van Code recently shared a tweet analyzing why XRP’s price declined despite multiple positive developments. His post included a conversation with ChatGPT, where he asked why XRP’s price fell from $2.50 to $2 before recovering slightly to $2.16, despite major bullish announcements. The AI’s response covered several factors, with Van Code emphasizing point three, which referenced market manipulation.
The tweet suggests that XRP’s price action does not align with expectations, given the stream of favorable news, including FDIC-related announcements and the resolution of legal matters. ChatGPT outlined six primary reasons for this disconnect. One explanation given was the common market phenomenon of “buy the rumor, sell the news.” This occurs when investors anticipate good news and price it in beforehand. Once the news becomes official, traders may take profits, leading to a selloff instead of further gains. This behavior is common in both traditional finance and cryptocurrency markets.
The second factor was the broader market sentiment. Even when XRP has positive news, overall market conditions influence its ability to gain traction. Bitcoin’s price movements, macroeconomic factors like inflation concerns, and regulatory uncertainty can weigh down altcoins, including XRP. Even strong developments may not drive price increases if the general market environment is unstable.
Van Code highlighted ChatGPT’s mention of price manipulation as a significant takeaway. The AI pointed out that XRP has a history of being influenced by large holders and institutions who may intentionally push the price lower to shake out retail investors. These liquidity strategies, often employed by market makers and institutional traders, create psychological pressure on smaller investors. The suggestion that price movements may not always be driven by logical fundamentals but rather by deliberate strategies is the key focus of the tweet.
Another factor mentioned was the lack of new retail money entering the market. Even with positive announcements, its price may struggle to rise if no fresh capital flows into XRP. A significant increase requires not just existing traders cycling through positions but new participants willing to buy at higher prices.
Ask Aime: Why is XRP's price declining despite favorable news?
The AI also pointed to the residual effects of the SEC lawsuit. While the case was largely resolved in Ripple’s favor, regulatory uncertainty has left a lasting impact. Institutional investors remain cautious, while some exchanges have yet to integrate XRP trading without restrictions. These factors contribute to sentiment issues that can suppress price growth.
Finally, token supply dynamics were identified as another potential reason. Ripple holds a substantial amount of XRP and distributes tokens through monthly unlocks and over-the-counter (OTC) sales. While these distributions are part of a structured plan, they can introduce selling pressure, affecting price stability.
Van Code’s tweet highlights the frustration within the XRP community regarding price movements that do not seem to reflect ongoing positive developments. The response from ChatGPT outlined multiple reasons why the price may not have reacted as anticipated, with market dynamics, sentiment, liquidity strategies, and supply considerations all playing a role. The emphasis on whale manipulation as a possible factor underscores concerns that price movements in the crypto market are not always organic. Whether this is a temporary consolidation phase before a larger breakout remains uncertain.
