- XRP price fell to $1.35 as rising US rate expectations and weak momentum pressured buyers despite continued ETF inflows.
- XRP must hold $1.33 to avoid a deeper decline toward $1.30 and the $1.27 200-day SMA.
XRP price has fallen 2.2% over the past 24 hours to around $1.35 as rising US rate expectations and weaker short-term momentum pressure buyers. The decline comes despite continued inflows into US spot XRP ETFs, with $12.29 million entering the products shortly before the latest drop.
XRP Faces Pressure as Rate Expectations Rise
XRP dropped to around $1.33 during the latest sell-off before recovering slightly to $1.35. The decline extends a broader pullback that has pushed XRP down 6.5% over the past seven days.
The pressure has followed a strong August rally in which XRP climbed from around $1 to nearly $1.70. Since then, buyers have struggled to regain the levels reached during that move.
Broader market conditions have also turned less favorable for risk assets. US producer prices increased 0.4% in August, adding to inflation concerns as energy prices remained elevated.
Markets were pricing a roughly 70% to 71% probability of a 25-basis-point Federal Reserve rate hike next week. The US 10-year Treasury yield also moved close to 5%, adding further pressure to cryptocurrencies.
Brent crude remained above $100 as tensions in the Middle East raised concerns about energy supplies. Higher oil prices could keep inflation expectations elevated and influence the Federal Reserve’s next rate decision.
The next major macro trigger is US consumer price data due later Friday. A hotter reading could strengthen expectations for higher rates, while softer inflation could ease some of the pressure on crypto.
XRP ETF Inflows Continue Despite the Sell-Off
XRP’s decline has not stopped money from entering US spot XRP ETFs. The products had accumulated around $1.68 billion in net inflows earlier this week. However, weekly inflows slowed to roughly $19 million from about $110 million the previous week.
The ETFs also recorded another $12.29 million in inflows shortly before Thursday’s decline.
At the same time, XRP derivatives activity has weakened. Open interest fell about 14% earlier this week, dropping from roughly $558 million to $478 million. The estimated leverage ratio also declined from 0.203 to 0.182.
Around $14.2 million in XRP positions were liquidated across two sessions, including roughly $13.66 million in long positions during Thursday’s decline.
The combination of ETF buying and derivatives deleveraging suggests that spot demand is still present, but leveraged traders have been reducing exposure as XRP loses momentum.
XRP Price Analysis: $1.33 Support Remains Critical
XRP remains above its major daily moving averages despite the latest decline. The 50-day SMA is around $1.212, while the 100-day SMA sits near $1.164. The 200-day SMA is around $1.274, making it the closest major moving-average support below the current price.
The first level buyers need to defend is around $1.33, where demand appeared during the latest sell-off.
A break below $1.33 could expose XRP to $1.32 and then the psychological $1.30 level. If selling continues, the 200-day SMA near $1.27 could become the next major downside target.
Short-term momentum also remains weak. On the four-hour chart, the Directional Movement Index shows -DI at around 23.5 compared with +DI near 15, indicating that sellers currently have greater directional control.
However, the ADX is around 19.5, below the 20 level often used to identify a stronger trend. This suggests that while the short-term bias is bearish, sellers have not yet established a strong downtrend.
XRP’s Rate of Change is also negative at around -3.18%, while recent price action has produced lower short-term highs.
For buyers to regain control, XRP would first need to recover the $1.38 area and then break through $1.40-$1.41. A move above that resistance could open the way toward $1.45 and potentially the $1.48-$1.50 region.
For now, $1.33 remains the key level to watch. Holding it could give buyers another chance to challenge $1.40, while a decisive break below it would increase the risk of a move toward $1.30 and the 200-day SMA.
ALSO READ: LUNC Price Drops Toward $0.00005 as Terra Classic Burn Tax Rises to 1.5%
DISCLAIMER:
This article reflects the author’s views and is provided for informational purposes only. While we strive for accuracy, the publisher does not guarantee that all information is complete or current. Readers should verify important information and consult appropriate sources before making decisions based on this content.
About the Author
