XRP has been one of the weakest performers among large-cap cryptocurrencies recently, sparking concerns among investors. While the entire market is dealing with a downturn, XRP has taken an even bigger hit, shedding almost 30% of its recent gains.
Struggling to hold above the $2 mark, many are wondering if this is a signal for more trouble ahead.
Let’s dive in and uncover the factors that could determine XRP’s next move.
Why Is XRP Struggling?
A key factor behind the price drop is the upcoming monthly token unlock for XRP. On January 1, 2025, Ripple will release 1 billion XRP tokens as part of its operational funding strategy. Historically, such events increase selling pressure, which makes traders cautious about price stability.
Macroeconomic Pressures Add to the Strain
Beyond the internal factors, broader economic conditions are also affecting XRP. The Federal Reserve recently announced a 25-basis-point interest rate cut. While this move was expected, the Fed also gave a more cautious forecast for 2025, reducing the expected number of rate cuts from four to two.
This has added to uncertainty and impacted risk assets like XRP.
Traders Step Back
According to Coinglass data, XRP’s open interest has slightly dropped, indicating that some traders are closing their positions due to growing market volatility. This has added further downward pressure on the price.
What’s Next for XRP?
Despite these challenges, XRP has struggled to hold its key support level at $2.20 and has been stuck in a tight range for the past month. This situation mirrors a three-month consolidation phase earlier this year, which ended with a price rally in November.
If the current trend continues, XRP might not break above $3.00 until late February 2025. During this period, any large sell-offs could push the price down to $1.58, increasing losses for investors.
On the positive side, a change in the crypto market could quickly shift XRP’s fortunes. If it can break the $2.73 resistance, XRP could rise to $3.00 and even aim for a new all-time high above $3.31.
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While the road ahead remains uncertain, XRP’s potential for recovery will depend on a delicate balance of internal and external factors.
FAQs
XRP might reach a high of $3.99 or an average of $3.07.
The all-time high of XRP is $3.84, achieved on January 4, 2018, marking the highest price it has reached since its launch.
Source: https://coinpedia.org/news/why-xrp-price-is-going-down-today/