In the past three months, Bitcoin has lost 20% and XRP is down almost 35%.
Market jitters have caused prices to plummet, highlighting crypto’s continued volatility.
So far, Bitcoin and XRP have erased any losses and set new highs — eventually.
The broad reason XRP and Bitcoin are falling is that confidence is faltering, causing a broader cryptocurrency sell-off.
Sentiment has a big effect on crypto prices, and investors are nervous.
While the U.S. Federal Reserve did cut rates as expected in December, its hawkish tone did little to reassure the markets.
Lawmakers’ lack of progress on further crypto regulation also weighs on prices.
Moreover, the effects of the dramatic crash on Oct. 10 are still being felt.
Per Coinglass data, around $19 billion in leveraged crypto got liquidated — an unprecedented amount.
It took a huge amount of liquidity out of the market and demonstrated just how much of crypto trading relies on borrowed funds.
At the time, people labeled it a flash crash because prices seemed to rebound afterward.
But it was the beginning of a slow drop that may not yet have bottomed.
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