The crypto market is holding its breath as the Federal Reserve is widely expected to announce another rate cut next week. With an 86% probability of a 25-basis-point reduction, the move signals a shift in monetary policy—one that could ripple through traditional and digital markets alike. For XRP price, this decision comes at a critical juncture. The token is consolidating near the $2 mark, showing early signs of compression that could lead to a decisive breakout or breakdown.
How the Fed’s Decision Could Influence XRP Price Prediction
When the Fed lowers interest rates, liquidity usually flows toward higher-risk assets like cryptocurrencies. Investors see reduced borrowing costs as a green light to move capital away from bonds and into speculative sectors. In the short term, this could boost demand across the crypto market, especially for large-cap coins like XRP that have historically tracked broad market sentiment.
However, this policy shift isn’t without risk. If the rate cut sparks fears of inflation, the dollar might weaken temporarily, boosting crypto prices, but an overheated market could later face correction once inflation pressures resurface. In essence, XRP’s near-term rally potential depends not only on the cut itself but on how investors interpret the Fed’s broader tone—whether it signals a short-term stimulus or a sustained dovish stance.
Technical Analysis: XRP Price Faces a Tight Squeeze
The XRP price daily chart shows price holding just above the $2.04 zone, hugging the lower Bollinger Band range. The bands have tightened, signaling a phase of volatility contraction. Historically, such setups precede large directional moves. The middle band (SMA 20) around $2.11 acts as immediate resistance, while the upper band near $2.28 defines the ceiling for bullish expansion.
The Heikin Ashi candles show mild indecision—smaller bodies and wicks on both sides—hinting at market hesitation. A sustained close above $2.12 could trigger momentum toward $2.25, followed by a potential retest of $2.40 if volume supports the breakout. Conversely, if the Fed’s policy leads to short-term dollar strength or risk-off sentiment, a drop below $1.94 would open the path to $1.80 and potentially $1.60, where historical support lies.
XRP Price Prediction: What to Expect Next
Over the next two weeks, XRP price trajectory will likely mirror macro volatility. A confirmed Fed rate cut accompanied by dovish language could ignite a mild relief rally, pushing XRP toward $2.20–$2.40 before the year-end. But if markets perceive the decision as panic-driven—an admission that the job market is deteriorating—risk assets could slip, dragging XRP back toward the $1.80 region.
The critical point here is compression. XRP’s Bollinger Band squeeze shows that the market is coiling for a significant move. Traders should watch the $2 zone closely—it’s not just psychological support but a structural pivot where bulls and bears are evenly matched. The next breakout from this range will set the tone for the rest of December.
If the Fed’s policy sparks renewed investor optimism, $XRP could rebound toward the mid-$2 range, supported by improving liquidity conditions. But if the narrative turns toward economic weakness, expect a pullback toward $1.80 before any recovery attempt. Either way, XRP is entering a volatility window where patience and precision matter more than prediction.