XRP, the digital token created by Ripple's founders, has been suffering sharp losses in recent weeks, falling back to Earth as the price gains fueled by recent hype evaporate. The digital asset dropped to as little as $0.4591 today, down more than 40% from the September high of $0.7694, according to CoinMarketCap .
When explaining these sharp price fluctuations, analysts focused largely on changing sentiment.
XRP "skyrocketed because of the hype surrounding Ripple announcement and events but, fundamentally, nothing changed," said Tim Enneking, managing director of Digital Capital Management .
"The drop is simply XRP returning to earth, back to the range it 'should' be trading in," he added.
These intense changes in value took place during a period of low volatility in the digital currency markets, noted C hris McClure, Ph.D., chief marketing officer of cryptocurrency data provider Svandis .
"The sell pressure has really lost its momentum within these current ranges," he stated.
McClure stated that:
XRP made these unexpectedly phenomenal runs past recent levels of resistance. However, these were the purest definitions of the FOMO mindset. The problem with a run like that, in a market of currently low volume, means that it is exposed to little support.
Going forward, the digital currency will likely keep experiencing notable price fluctuations, stated Eric Ervin, CEO of Blockforce Capital .
" We believe hype-driven volatility will continue causing XRP prices to vacillate in the short-term while searching for, potentially asymptotic, long-term equilibrium," he said.
Disclosure: I own some bitcoin, bitcoin cash and ether....