XRP price decline today
XRP price decline today
The Impact of Rising Dollar Strength on XRP Price
XRP (XRP) price has experienced a decline recently, reflecting wider trends within the cryptocurrency market. This drop comes as traders eagerly await the Federal Reserve’s upcoming rate decision. On July 24, XRP price fell by 8% to $0.68, underperforming the broader crypto market’s 3.5% decline on the same day. The XRP/USD pair decreased in value due to increasing expectations that the Fed would raise interest rates by 25 basis points during its July 25-26 meeting1.
The prevailing view is that a higher interest rate environment is detrimental to cryptocurrencies like XRP. Consequently, some traders have opted to shift their investments out of high-cap cryptocurrencies in favor of safer assets such as the U.S. dollar. These investors began selling at the peak of the market rally led by Ripple on July 13. It is worth noting that while XRP’s price soared by 75% on that day, it failed to sustain those gains above $1, resulting in a subsequent decline of 28%2.
During this period, the U.S. dollar index (DXY) experienced a bounce of nearly 2%. As a result, the correlation coefficient between DXY and XRP dramatically shifted from +0.25 on July 13 to -0.79 on July 24. Such a correlation coefficient indicates a greater likelihood of XRP prices continuing to drop if the value of the dollar continues to rise in the coming months3.
Insights into the XRP Market for July and Beyond
From a technical standpoint, XRP has recently entered an overbought correction stage, with its weekly relative strength index (RSI) reaching 72. This represents the highest level seen since April 20214. As we analyze the potential scenarios for the XRP price, there are two possible outcomes.
- Investors shift from Bitcoin funds to Ether and XRP due to large inflows
- Worldcoin set to launch on Monday amid growing interest in AltSignals fueled by AI gold rush.
- Binance, Bybit, OKX, and other exchanges list new Worldcoin (WLD) token
The bear scenario suggests that XRP prices will decline towards the $0.59 level in July or early August. This level served as support during the period from July 2021 to January 2022 and also coincides with the 0.236 Fibonacci retracement line, which is drawn from the swing high of $1.15 to the swing low of $0.305. In this scenario, XRP would face a decline of approximately 13% from its current price.
Conversely, if XRP manages to achieve a decisive close above the 0.382 Fibonacci retracement line near $0.77, it could potentially retest the $1 resistance level. This would represent a gain of around 30% from the current price levels6.
In summary, XRP price has been adversely affected by the rising strength of the U.S. dollar. Market participants have shifted their focus to safer assets, resulting in a decline in the price of XRP. However, technical analysis suggests potential support levels and future resistance levels for XRP prices. Traders and investors should carefully consider these factors before making decisions in the XRP market.