XRP, the third-largest virtual currency in the market has certainly suffered a lot in the last weeks. As Coronavirus expanded, investors decided to move away from risk assets. Virtual currencies were certainly affected by this sell-off.
This is why XRP reached the lowest price since May 2017. The main question is whether it will be possible for XRP to recover from the current bear trend. It is worth taking into account that virtual currencies have large price changes in short periods of time.
Thus, it may be possible for XRP to have an overall positive 2020. Despite that, it will certainly depend on the entire financial market and economic situation. Nonetheless, Ripple is working on a daily basis to attract new companies that would work with XRP. At the same time, the Bitcoin halving narrative could help the entire market recover in the coming months.
One of the first things that affected XRP in the last weeks was, as mentioned before, the Coronavirus. This virus is growing and expanding all over the world, in what already became a pandemic. This is affecting not only the financial markets but also the real economy.
Governments have decided to take extreme measures in order to contain the virus. Cities are under lockdown and Italy became now a blocked country. In the future, other countries could follow. Indeed, in the future, the measures could become even harder. Until now, there are over 162,000 cases and more than 6,000 deaths of Coronavirus.
The main question is how this could affect the crypto market and XRP price prediction for 2020. The next section will be used to explain how financial markets are connected to this health crisis. Cryptocurrencies, as a new asset class, are showing how they can also be connected to financial markets.
The panic in the market has expanded all over the world. Developed nations’ financial markets fell massively in the last few weeks. This is what happened in cryptocurrencies. Bitcoin (BTC) plummeted to almost $3,800 while other virtual currencies followed.
XRP moved from $0.33 on February 15 to $0.11 a few days ago. This shows that in almost a month, XRP lost 66.66% of its value. The main reason for the massive sell-off is related to investors searching for safe assets. Assets that provide low profits but are certainly safe are attracting most of the investors.
Emerging markets have also suffered. Larger funds decided to move their positions and investments in EM to developed markets. This exodus pushed emerging currencies to depreciate against developed currencies. The U.S. dollar and the Euro remained as the leaders in the FX market in recent days.
XRP Price Prediction For The Next Months
It is certainly difficult to predict what can happen to the crypto market. Indeed, it is certainly possible for it to grow in the coming months and end the year with gains. Nonetheless, there is huge uncertainty in the economy and all over the world.
What will happen with investors that lost their jobs or were affected by the current sell-off? What will happen with the economies of countries that will experience recessions? This is certainly going to affect XRP performance in the coming months.
Obviously, we still need to remember Bitcoin will experience a halving event. This could play a very positive role in the future. Indeed, if the halving helps to build a bullish narrative around Bitcoin’s price, it can also push XRP to reach higher prices.
The Bitcoin halving occurs every four years and it reduces the new issuance of Bitcoin by half. In this way, demand in the market would help the price of this digital asset to reach higher values. As it happened in the past, if Bitcoin enters a new bull market, altcoins are expected to follow.
At the same time, we don’t need to forget all the efforts Ripple is doing. They are trying to expand the usage of the XRP virtual currency to new clients all over the world. This could help increase the demand for XRP and eventually positively affect its price.