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Will XRP Plunge Below $1 in February? ChatGPT Reassesses After Ripple’s Crash

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Will XRP Plunge Below $1 in February? ChatGPT Reassesses After Ripple’s Crash


The last time we asked ChatGPT this question, it was rather dismissive. Now, its answers were significantly less optimistic.

The price moves from precisely a month ago could hardly have anticipated what happened in the following 30 days. XRP, for example, skyrocketed by 30% at the time to $2.40 amid growing ETF inflows.

The subsequent rejection and correction, though, were brutal. After several consecutive leg downs, the culmination, at least for now, transpired earlier today when it plunged below $1.40 and now struggles at $1.35. As such, we decided to revisit a painful question for ChatGPT.

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Below $1 Now?

CryptoPotato first asked this question over the weekend when the landscape around Ripple and its native token was not as grim. XRP traded at around $1.60 after its most recent crash, but it seemed as if it had bottomed. Perhaps that’s why most AIs agreed that the chances for a drop beneath $1.00 in February were quite slim at the time.

However, that perceived bottom gave in during the current trading week, as mentioned above. Consequently, we asked ChatGPT whether its view on the matter will change now.

The AI’s short answer was yes, as the probability of such a drop is “meaningfully higher now than it was when XRP was at $1.60-$1.70.” At the time, the token still traded above major structural support, and the broader market hadn’t rolled over so decisively. There was no confirmed breakdown of higher-timeframe levels, and the sentiment wasn’t entirely bearish.

A lot changed in the following several days, though. Momentum has accelerated to the downside as XRP sold off aggressively, “slicing through intermediate supports and failing to hold rebounds.” Additionally, February has just started, and there’s too much time for such a drop to occur if the overall conditions do not improve rapidly.

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Dip or Breakdown?

Given the current circumstances, ChatGPT believes that the probability of XRP remaining above $1.00 in February is around 40%. It expects that there will be some consolidation and choppy trading after such heightened volatility and declines.

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However, it also noted that there’s a 35-40% chance of a liquidity sweep to just under $1.00 in the next few weeks. It would be prompted by a fast sell-off, resulting in a panic wick, before a sharp rebound. This scenario, it added now, has become “very real.”

It still dismissed the possibility of a full-on breakdown below $1.00, saying the percentages are around 15-20% now. Although this scenario appears least likely for ChatGPT, it still acknowledged that it had gone from negligible (over the weekend) to quite possible (now).

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Crypto World

Stablecoins Do Not Threaten Banking Just Yet: Analyst

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Stablecoins Do Not Threaten Banking Just Yet: Analyst

The impact of stablecoins on the banking sector appears “limited” at the current phase of the adoption cycle, but banks could face increasing competition and an erosion of market share as the stablecoin sector and tokenized real-world assets (RWAs) grow in market capitalization. 

“So far, the use of stablecoins remains limited, but their market capitalization exceeded $300 billion at the end of last year,” Abhi Srivastava, associate vice president of Moody’s Investors Service Digital Economy Group, told Cointelegraph.

The stablecoin market cap has surged past $300 billion. Source: RWA.xyz

The role of stablecoins in payments, cross-border commerce and onchain finance is “expanding,” despite their currently limited role, Srivastava said, adding that existing payment systems in the US are already “fast, low-cost and trusted.” He said:

“For the banking sector, at this stage, disruption risk appears limited. In the near term, US rules that prohibit stablecoins from paying yield mean they are unlikely to replace traditional deposits at scale domestically.”

However, over time, growing adoption of stablecoins and tokenized RWAs, traditional or physical financial assets represented on a blockchain by a token, could place “pressure” on the banking sector, leading to deposit outflows and reduced lending capacity, he said.

Stablecoin regulatory policy has become a hot-button issue among crypto industry executives and those in the banking sector, with fears that yield-bearing stablecoins could erode banking market share proving to be a stumbling block for the CLARITY crypto market structure bill in Congress. 

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Related: Stablecoins behave like FX markets as liquidity splits: Eco CEO

CLARITY Act stalled, as banks fight yield-bearing stablecoins

The Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act, is a comprehensive crypto market regulatory framework that establishes an asset taxonomy, regulatory jurisdiction and oversight over the crypto markets.

The CLARITY crypto market structure bill. Source: US Congress

It is now stalled in Congress after a group of crypto industry companies, led by cryptocurrency exchange Coinbase, publicly stated opposition to earlier drafts of the bill.

A lack of legal protections for open-source software developers and a prohibition on yield-bearing stablecoins were among some of the most contentious issues cited by crypto industry opponents of the legislation.

Several attempts have been made by US lawmakers and the White House to negotiate a bill acceptable to both the crypto industry and the bank lobby.

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Earlier this month, North Carolina Senator Thom Tillis said he plans to release an updated draft bill proposal that would be acceptable to both sides; however, the bill has reportedly received pushback, according to Politico, and has yet to be publicly released. 

However, other crypto industry executives and market analysts have warned that if the CLARITY Act fails to pass, it could open the crypto industry up to future regulatory crackdowns by hostile lawmakers and officials.

Magazine: Stablecoins will see explosive growth in 2025 as world embraces asset class