Earlier today the Ripple (XRP) price looked as though it was on the verge of breaking out of its downtrend and was going to rebound higher after a sharp decline overnight.
Unfortunately, this hasn't been the case and the third-largest cryptocurrency has given back its early gains and finds itself pushing lower again and down to its lowest level this week.
At the time of writing the XRP price is down over 19% since this time yesterday at 64.9 U.S. cents.
This has reduced its market capitalisation to just US$25.3 billion, meaning a massive US$107 billion (A$136 billion) has been wiped off its value in less than a month.
That's the value of Australia's largest bank, Commonwealth Bank of Australia (ASX: CBA), gone in the blink of an eye.
What happened?
Investors have been turning their backs on cryptocurrencies amid concerns over increasing regulatory scrutiny, ICO advertising bans, alleged price manipulation on the Bitfinex exchange, and bans by credit card providers.
It wasn't just Ripple sinking lower. Both bitcoin (BTC) and Ethereum (ETH) have fallen over 20% during the last 24 hours.
What's next for Ripple?
At this stage I think it is unclear whether cryptocurrencies have found their bottom yet. I suspect, however, that they have not.
I fear this could mean further selling pressure over the coming days of a similar magnitude to what has been experienced in the last few weeks.
In light of this, I don't believe the risk/reward on offer in the industry is anywhere near compelling enough to make an investment today. As a result, I continue to believe that the prudent thing to do at this point is to watch on from the safety of the sidelines and focus on some of the quality up and coming shares that the local share market has to offer.
