South Korea’s ongoing political turmoil continues to disrupt its economy and cryptocurrency markets. XRP and the local currency, the Korean won (KRW), significant declines in market capitalization amid the impeachment of interim President Han Dark-so. Investors are now worried that market reactions will reverberate far beyond the country’s borders.
As news of Han’s impeachment spread, South Korea’s cryptocurrency markets took a hit. XRP, the world’s fifth-largest cryptocurrency by market capitalization, saw its value fall by more than 3% over a turbulent week. The South Korean won also followed a similar trend, falling to its lowest level in nearly 16 years. It has fallen more than the 1480 mark per dollar.
The sale of XRP and other digital assets has fueled concerns about broader market volatility. Economic instability in South Korea, exacerbated by the political crisis, has raised fears of further disruptions to the cryptocurrency market.
Political Turmoil and Economic Fallout in South Korea
South Korea is one of the largest cryptocurrency trading markets, and the turmoil surrounding the isolation of Han and the country’s currency has had direct consequences for the digital asset sector.
Political chaos, sparked by Yoon’s controversial martial law declaration on December 3, led to economic fallout reflected in a sharp drop in business sentiment. According to a Trading Economics report, the business sentiment index fell to 62 in December, the lowest level since July 2020. These appointments enable the court to decide whether to uphold Yun’s removal or reinstatement.
XRP, along with other major cryptocurrencies, has seen fluctuations in value as South Korean investors, who account for a large portion of global trading volume, reacted to the political crisis.
XRP volatility and the impeachment of interim Korean President Han
In the early hours of Friday morning, the original Ripple reached a seven-day low against the won, falling to values just below 3200 before returning above 3300. At the time of writing, XRP is trading around 3100 to 3350 won on Upbit.
Data from Trading View charts also shows that Upbit, South Korea’s largest crypto exchange, has seen a 40% drop in trading volume over the past day. The measure of market position has been neutral for weeks now, which could mean investors are unsure whether to collect or sell.
However, XRP remains the most popular cryptocurrency in the country, with almost doubling its daily trading volume from Bitcoin, the world’s largest cryptocurrency by market capitalization.
In an attempt to calm the storm, Finance Minister Choi Sang-Mock held an emergency meeting with the governor of the Bank of Korea and promised “decisive” measures to stabilize the market.
But these interventions have yet to allay concerns about South Korea’s financial future. As political instability continues, market volatility is expected to remain high, putting pressure on domestic and international investors.
South Korea’s National Assembly voted Friday to impeach interim President Han Dark-so. He is the second head of state to be ousted this month after the ouster of President Yoon Suk Yolo. These latest political unrest comes just two weeks after Yoon was sacked from office, which erupted over his controversial imposition of martial law earlier in December.
On December 3, President Yoon declared martial law for six hours, the first such decree since the 1979 military coup. Yoon justified the move as necessary to “protect the constitutional order” and counter what he described as anti-state groups and pro-North Korean forces that threaten the nation’s stability, NBC News reports.
XRP price drop warnings amid possible correction
The price of XRP (XRP-USD) has been on the rise, rising more than 300% over the past two months to reach $2.20 by December 27. However, warning signs appear that may indicate a sharp decline in early 2025. The cryptocurrency is currently trading within a descending triangle pattern, a technical formation that usually indicates further declines. If the price of XRP falls below its $2.10 support level, it could face a 25% decline, and could fall to $1.64 by January.
On chain data reveals that large XRP holders, or “whales,” were selling large parts of their property, with 180 million XRP sold by wallets containing more than one million tokens. This selling activity added downward pressure to the price. In addition, XRP reserves were on Binance They are steadily increasing, suggesting the transfer of more tokens to exchanges – often as a precursor to price corrections. According to Coin Desk, these developments suggest that XRP may be ready to roll back.
The impeachment vote saw 192 deputies vote in favor, far exceeding the 151 votes required for approval. It was the first time in South Korea’s history that an interim president had faced such a proposal. In response, lawmakers from Han’s ruling People’s Power Party protested the operation, some even boycotting the vote.
Han’s ruling People’s Power Party claimed that filling these vacancies was beyond Han’s duties as interim president.
Han’s suspension is now imminent, but his position remains uncertain pending the Constitutional Court’s decision, which could take up to 180 days. Meanwhile, Finance Minister Choi took over as the country’s interim leader.
