XRP price made a strong bearish breakout today, June 3, continuing a downtrend that started on May 14 when it peaked at $1.5486. It dropped below a crucial support level and reached its lowest point since February this year. It has now plunged by over 66% from its highest point last year.

The ongoing XRP price crash is happening despite the ongoing demand for Ripple ETFs and the improving ecosystem. While these ETFs did not add any assets on Tuesday, they have been in a positive trajectory.

Spot XRP ETFs added over $131 million in assets in May, the best performance this year. This was a big increase compared to the $81 million they added a day earlier. 

In total, spot Bitcoin ETFs have had cumulative inflows of $1.43 billion, led by those by companies like Bitwise, Canary, and Franklin Templeton. In contrast, spot Bitcoin and Ethereum ETFs have shed billions of dollars in assets this year.  Bitcoin ETFs lost over $2.4 billion in assets in May, while Ethereum shed $540 million. 

Notably, the ongoing XRP price crash is happening as its fundamentals remain robust. For example, Ripple Labs has acquired several important licenses this year, including from the UK, Australia, and the European Union. 

Ripple also achieved a valuation of $50 billion earlier this year. That was $10 billion higher than what the company was valued at when Citadel invested in it late last year. 

The Ripple USD (RLUSD) stablecoin has also continued doing well, with its assets under management (AUM) soaring to over $1.8 billion. Recent data shows that the coin’s volume jumped to over $22 billion in the last 30 days. That is a sign that its utility is growing this year, a trend that will continue after the signing of the CLARITY Act. 

The main reason why the XRP price is falling despite the improving ecosystem is that demand for cryptocurrencies has fallen. Indeed, the market capitalization of all coins has dropped from over $4 trillion last year to $2.3 trillion today. Bitcoin and most altcoins have all plunged by double digits. 

The XRP price is also falling this year because of the ongoing rotation towards companies and assets with an AI angle. For example, a closer look at the top gainers in the S&P 500 Index shows that they are all in the AI industry. This includes companies like Sandisk, Micron, Intel, and Western Digital. 

As a result, investors have pumped billions of dollars into these assets this year. Total ETF inflows in May stood at over $200 billion, with Vanguard’s VOO nearing the $1 trillion valuation. 

In addition to AI companies, investors are also moving to space companies ahead of the SpaceX IPO. For example, top space ETFs like UFO and NASA have added billions of dollars in value this year.

XRP price chart | Source: TradingView

The daily chart shows that the XRP price has remained inside a narrow range this year. It has stayed inside the key support and resistance levels at $1.2740 and $1.5486 since February last year. 

XRP made a strong bearish breakdown below the channel’s lower side. It has also remained below all moving averages, while the Relative Strength Index (RSI) has remained below the oversold level.

Therefore, the most likely scenario is where the coin continues falling, potentially below $1 this year. 

The post Here’s why the XRP price just lost a crucial support level today (June 3) appeared first on Invezz

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