XRP traded at $1.20 after dropping 8.05% in the past 24 hours and losing 17.55% over the past month, as political and regulatory developments sent shockwaves across the cryptocurrency market. The token’s latest decline drew widespread reactions from traders and analysts, who debated the causes and permanence of the fall.
Political shift drives XRP selloff
The selloff followed the outcome of recent US midterm elections, with Democrats securing control of both the House of Representatives and the Senate. Many crypto market participants expressed concern about this result, anticipating that it could make regulatory progress for digital assets increasingly difficult.
One focal point was the CLARITY Act, legislation aimed at creating a clear regulatory framework for cryptocurrencies. The bill’s progress had stalled after Democrats blocked it in September. Now, with Democratic majorities in both chambers, the likelihood of advancing such crypto-friendly legislation has diminished considerably, prompting many traders to sell in response.
XRP’s price movement has long reflected shifts in the regulatory environment, and with Congress now controlled by Democrats, many in the market believe the chance for crypto-friendly legislation in the near-term has faded.
Market-wide downturn intensifies
XRP was not alone in its losses. Bitcoin slipped below $76,000, giving up its post-election rally, while Ethereum dropped by nearly 7%. The broader market reaction suggests that uncertainty about US regulatory policy is weighing heavily on digital assets.
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Community debates ‘fake dump’ claims
Prominent crypto analyst Crypto Michael (@MichaelXBT) addressed the decline on social media, urging his followers not to panic. He described the market action as a “fake dump” and cautioned against overreacting. His comment quickly gained attention from the XRP community.
Citing trading volume of $2.92 billion in the last 24 hours, one community member argued that a genuine selloff was underway and that significant volume supported the validity of the decline, questioning the idea that the drop was merely artificial.
Other users criticized Crypto Michael’s view, suggesting that if he had predicted the drop earlier, he would have characterized the move differently. Some took issue with what they saw as shifting narratives after the fact.
Near-term outlook remains uncertain
XRP remains under pressure at $1.20, and while recent regulatory steps from agencies such as the SEC and CFTC, along with the approval of Ripple Natural Trust Bank, offer positive catalysts, many investors see these as insufficient to offset the prevailing bearish sentiment stemming from the political shift.
The loss of a key pro-regulation narrative has prompted the market to reprice XRP, at least for now. Whether predictions of a “fake dump” will prove accurate depends largely on the policy direction taken by the new Congress regarding digital assets in the coming months.
At present, sellers appear to be in control as the regulatory outlook continues to evolve and traders await further developments from US lawmakers.
