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XRP witnessed a significant decline of 8.5% within a single day, experiencing the largest drop among the top cryptocurrencies, amidst an abrupt sell-off in the digital asset markets on Wednesday.

CoinDesk Indices data reveals that the token experienced a significant drop, reaching its lowest point this month at 46.18 cents. In contrast, XRP's price soared to almost 56 cents on Tuesday as traders eagerly anticipated the release of a highly anticipated document linked to the ongoing legal battle between Ripple Labs, a prominent payment firm, and the U.S. Securities and Exchange Commission (SEC). This surge in anticipation led traders to speculate that XRP could see a considerable increase in value.

XRP experienced a significant decline as bitcoin (BTC) and ether (ETH), the top two cryptocurrencies in terms of market capitalization, suffered losses in their price levels on Wednesday afternoon following the Federal Reserve's recent interest rate announcement. Despite expectations that the Fed's decision to pause its rate hike campaign after 14 months would have a positive impact on prices, BTC and ETH both dropped to their lowest points in three months, falling below $25,000 and $1,700, respectively.

In 2020, the SEC filed a lawsuit against Ripple, accusing the company of selling unregistered securities, specifically XRP. Despite this, Ripple has consistently emphasized its separation from the token, highlighting its use as a means to operate certain products and the XRP Ledger network.

XRP experienced a surge earlier this week following the publication of emails from William Hinman, the former director of the SEC's Division of Corporation Finance. Traders with an optimistic outlook placed their bets on Hinman's speech shedding light on the flawed reasoning behind the SEC's classification of XRP as a security. This development raised hopes for Ripple Labs, as it indicated a potentially favorable outcome in the ongoing legal battle between the company and the SEC.

Speculation about the lawsuit’s end have occasionally spurred enthusiastic XRP price predictions. “Currently, we observe huge speculative narratives around Ripple, which could potentially lead to a significant price increase for XRP in the next three to four months, pushing its value to anywhere between $10 and $30,” crypto hedge fund manager Thomas Kralow said in a note earlier this week.

Source Coindesk