XRP's Price Plunge: What Lies Behind the Dip?

XRP's price has fallen by 8% over the past week, but this dip is not necessarily cause for concern. In fact, the cryptocurrency was one of the best performers in the crypto market just ten days ago, surging from around $1 to an intraday high of $1.6963.

This rapid price increase was largely driven by macroeconomic factors, including the US Treasury's announcement that it would expand its buybacks of long-dated government debt. This move sent yields falling and triggered a short squeeze in XRP, which had been underperforming badly and was crowded with bearish positioning.

However, when the liquidity fuel ran out, the price came back down, resulting in this week's 8% decline. While some analysts may view this as a crash, it is more accurate to say that XRP has given back part of its recent gains.