Yesterday, Ripple prices took a minor hit as investors extracted profits from earlier trading. The momentary sell-off was necessary to expunge fickle speculators, but it also ended a hot streak of Ripple news by adding red ink to the cryptocurrency’s price chart.
It’s doubtless that some analysts will claim the fall was “unpredictable.” But it doesn’t take a rocket scientist to understand the dynamics of herd behavior.
The rate of Ripple price growth was accelerating at a dangerous level, or to put it in visual terms, it was getting absurdly steep. Like with gravity, things start to tumble when inclines get too steep, leading to broken necks and price corrections.
That is essentially what happened to Ripple—it overheated.
Investors that are able to see beyond the month (or just the end of their nose, really) are still holding on to their positions. The speculative token flippers that followed them into XRP just wanted another quick turnaround.
Given that Ripple jumped 60% on Tuesday, the temptation to cut and run was understandably strong. However, it doesn’t alter our Ripple price prediction at all.
At the time of writing, XRP prices were down 4.98% to $0.266271.
If a five-percent drawdown terrifies you, perhaps cryptocurrencies are not the right investment for you to consider. Wild swings are part and parcel of this emerging sector, which is precisely why it’s possible to double your money in a day. Those are two sides of the same coin.
That said, I think the pros outweigh the cons, especially when it comes to Ripple. This blockchain company is making enterprise plays unlike anything else we’ve seen in the sector.
It is also still trading below where it was in May, so there is almost certainly more upside yet to come.