Despite ending July on a high note compared to its peers, XRP price over the past few days remains low with levels still below the $0.7 mark. Stakeholders have expressed concerns over the continued poor performance of XRP in the broader cryptocurrency space. This significant price slump seems connected to the ongoing banking crisis in Japan.
Japan’s Banking Sector Challenges and XRP Ties
Specifically, the banking sector in Japan has been faced with challenges from around mid-July when the Bank of Japan decided to carry out interventions in the forex market as a measure to stem the falling yen. Notably, the FX rate was tethering near 162 yen/U.S. dollar and the bank’s intervention became important to prevent it slipping below that level.
How do you say “banking crisis” in Japanese?
And yet so many were bullish something I could never understand 🙈 pic.twitter.com/L1v22jaz3b
— JustDario 🏊♂️ (@DarioCpx) August 2, 2024
The intervention efforts included going after lightweight hedge funds by trading against them but the currency slipped to approximately 157.5 yen/dollar recently. The Bank of Japan deployed similar measures against heavyweight speculators resulting in severe liquidations as they resorted to selling their positions.
Overall, this impacted the asset managers as brokers began selling massively. Given that the top allies of Ripple Labs and by extension XRP like SBI Holdings, Mitsubishi UFJ, and others have established businesses in Japan, they have had to take the hit.
Thus, selling off their positions to stay afloat might explain the dumping of XRP shares in the market.
How Feasible are Analyst Predictions for XRP?
Analysts believe this might be a significant factor in the recent price slump of the asset despite promising predictions for the sixth-largest cryptocurrency by market capitalization. As reported by U.Today, XRP has been on a six-year run of consolidation within a symmetrical triangle and this usually precedes a bullish rally.
Stakeholders, particularly investors in the XRP community anticipate a price rally that could lift XRP to the $0.9 to $1 levels. Getting the asset to cross these resistance levels seems like a difficult task at the moment given the banking mess created in Japan.
As of the time of writing, XRP has dropped by a massive 5.18% to $0.5763 within the last 24 hours and remains on a low level compared to projections.
