XRP price crashed after a temporary rally to $0.74 yesterday, and this comes after several weeks of Ripple staying below $0.30.

The digital currency was negatively affected by the lawsuit filed against it by the US Securities and Exchange Commission (SEC) last December.

Ripple finally rose over the weekend after news of a coordinated buying attack led by a group called “Buy & Hold XRP FEB 1st, 2021” spread on Telegram.

This group was inspired by the idea of ​​coordinated buying by individual traders joined under the Reddit forum called “WallStreetBets”, which, through a coordinated buying attack last week, caused the price of GameStop (GME) shares to rise.

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The upward trend in the price of this stock has led to huge losses for hedge funds such as Melvin Capital.

Telegram group and XRP price:

After the huge rise in GME shares, the infection moved to the crypto market, as the price of the digital currency “Dogecoin” rose to record levels.

The focus has quickly shifted from the digital currency DOGE to XRP.

The difference between the two may be that Dogecoin’s price hike can be attributed to retail investors’ fear of missing out (FOMO), while in the case of XRP, this was a classic example of pumping and dumping.

According To Alex Saunders, founder of Nugget News:

FOMO vs PUMP & DUMP

When the DOGE coin rebounded by 78.6%, the Balance Volume Index showed a bullish rally.

In comparison, the massive sell-off of XRP at higher prices has led to a bearish divergence in balance volume.

Therefore, I expect a complete correction of the XRP currency.

The same speaker added:

The rise of XRP is not due to the telegram group, although some insist that it is the reason.

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Let’s think logically and use numbers.

The 24-hour volume of XRP was above 26 billion.

Even if each group member spent $5,000 on XRP today, that would be 2% of the total daily volume recorded.

There is no Telegram group that can pump the fourth largest currency into the crypto market.

The pumping and dumping didn’t last long anyway, as the cryptocurrency lost more than half its value in a matter of hours.

It was also speculated on the fact that XRP’s gains over the weekend were due to Ripple’s strong response to the lawsuit brought against it by the US Securities and Exchange Commission (SEC).

The SEC is currently suing Ripple for selling unregistered securities in the form of XRP.

XRP Liquidity:

Currently, XRP is trading at $0.36 on Binance.

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The currency fell sharply after seeing a rise of more than 100% over the weekend.

However, its current price level may be profitable to some extent, as it managed to breach the psychological barrier represented by the $0.30 level.

Jesse Brodman, CEO of hedge fund Strix Leviathan, attributed the sharp drop in the price of Ripple to a lack of liquidity in XRP.

He explained that the only reason XRP pumps and dumps can happen is that XRP’s liquidity has become incredibly weak, especially with so many exchanges delisting the coin.

He added:

This lack of cash creates opportunities for global communities to coordinate pumping and dump attacks.

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