The cryptocurrency market is experiencing a bearish turn as major crypto assets, including XRP and Bitcoin, report significant losses. Bitcoin has fallen below $93k, while XRP retested its January 2nd low of $1.85 before settling at $1.97—a 3.7% drop in the last 24 hours. This downturn comes after last week’s bullish momentum, which was swiftly reversed due to escalating trade tensions between the United States and the European Union (EU).
US-EU Trade War: The Key Catalyst
The ongoing trade war between the United States and the EU has created heightened market uncertainty. The conflict escalated after President Donald Trump threatened to impose tariffs starting at 10%, rising to 25% by June, on imports from eight NATO allies, including Germany, the UK, and France. The move, tied to controversial demands such as the proposed sale of Greenland to the US, has been widely criticized by European leaders, who warn of a “dangerous downward spiral” in transatlantic relations.
According to Min Jung, an associate researcher at Presto Research, “While US-EU trade war concerns have had the largest impact on sentiment, other risk assets, including the KOSPI, are trading flat to higher. This suggests that crypto-specific weakness persists, with investors favoring other risk assets.”
XRP’s Bearish Momentum
The XRP/USD 4-hour price chart remains bearish, with the cryptocurrency down 4% over the last week. XRP’s Relative Strength Index (RSI) at 40 reflects growing selling pressure, while the Moving Average Convergence Divergence (MACD) line has dropped into the negative zone, further confirming bearish momentum.
If this selling trend persists, XRP could retest its $1.85 Monday low or drop as far as $1.80. However, in the event of a market recovery, XRP might surge past the $2.06 and $2.2 resistance levels, which remain critical barriers based on recent market performance.
Market Outlook: Broader Implications
Beyond XRP, the broader cryptocurrency market is struggling to maintain investor confidence amidst current geopolitical challenges. Though risk assets in traditional financial markets are faring better, cryptocurrencies like Bitcoin, Ethereum, and XRP have become the laggards, underperforming compared to other investment options.
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