XRP’s price took a hit by 10% due to concerns about regulations and a negative skew in the options market. The news of Bitwise filing for an ETF that would invest in XRP was overshadowed by the SEC’s appeal against Ripple Labs, creating uncertainty in the market. This appeal stems from the SEC charging Ripple with selling unregistered securities four years ago, causing a decline in XRP’s value.
The classification of XRP as a security is viewed as a bearish sign in the cryptocurrency market, as securities are subject to stricter regulations and require more transparency from companies. As a result, XRP’s price dropped by 11% in the past 24 hours, with a week-to-date loss of over 16%. This makes XRP the third worst-performing cryptocurrency among the top 100 coins by market value, with bitcoin and ether also experiencing losses.
In the options market, XRP traders on Deribit are displaying a more bearish sentiment compared to bitcoin and ether. The seven-day call-put skew for XRP is -3.2%, indicating a preference for puts to protect against price declines. On the other hand, bitcoin and ether have neutral or positive skews, suggesting a more positive outlook for these cryptocurrencies.
Additionally, the funding rates in the XRP perpetual futures market have turned positive, reversing a previous negative trend. This shift in funding rates indicates a potential bearish bias among traders, further contributing to the downward pressure on XRP’s price.
Overall, the combination of regulatory uncertainty, negative skew in the options market, and bearish sentiment among traders has led to a significant drop in XRP’s price. Investors and traders will be closely monitoring developments in the regulatory landscape and market sentiment to gauge the future direction of XRP’s price movement.