Will the Ripple (XRP) price rebound?

After sinking as low as 98 U.S. cents on Wednesday, the Ripple (XRP) price has started to recover again.

At the time of writing the XRP price is $1.12 according to Coin Market Cap, approximately 8% lower than where it was 24 hours ago.

This has left the cryptocurrency with a market capitalisation of US$43.4 billion, making it the third-largest in the world behind bitcoin and ethereum.

Bitcoin’s market capitalisation now stands at US$181 billion and ethereum’s is US$93 billion.

Will Ripple’s XRP recover?

While crypto traders will be pleased to see that XRP has started to head in the right direction again, it is still a long way off its all-time high.

Earlier this month XRP reached an all-time high of US$3.84, meaning it has shed almost 71% of its value in just two weeks and a massive US$104 billion off its market capitalisation.

To put that into perspective, that is almost the value of Australia’s largest bank, Commonwealth Bank of Australia (ASX: CBA), down the drain in the space of two weeks.

Unfortunately predicting whether it will bounce back is close to impossible. While bitcoin has bounced back from similarly heavy declines in the past, a lot of retail investors will have been hurt by this latest sell-off.

I’m not overly convinced that they will return to cryptocurrencies again, lest another drop wipe them out once more.

Furthermore, reported government crackdowns in South Korea and China may weigh heavily on the industry. These two nations have played a key role in the rise of cryptocurrencies and their absence will undoubtedly be felt.

Overall, I think an investment in Ripple’s XRP now is increasingly risky. As much as I rate the technology and believe it to be a far better option to bitcoin, I think investors ought to watch on from the safety of the sidelines whilst crypto markets find their feet again.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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