XRP’s price has experienced a notable downturn, erasing all gains from the past two weeks. The decline is primarily driven by delays in the Ripple vs. SEC lawsuit and reduced expectations for a September interest rate cut.
SEC Delays Closed-Door Meeting
The much-anticipated closed-door meeting on August 1 between the United States Securities and Exchange Commission (SEC) officials garnered significant attention from crypto traders, who speculated it would discuss a resolution with Ripple. However, the meeting was abruptly canceled, leaving both Ripple and the SEC tight-lipped and the crypto community in suspense.
Since August 1, XRP’s price has plunged by up to 10.75%, including a 6.75% drop today.
Declining Odds of Rate Cut in September
Today’s XRP losses are part of a broader decline in the crypto market, influenced by decreasing odds of an interest rate cut in September. As of August 2, CME data indicated that the likelihood of a 25 basis point (bps) rate cut in September had dropped to 71.50% from 88.2% a week prior.
These diminishing rate cut bets follow Federal Reserve Chair Jerome Powell’s press conference on July 31. Powell stated that any dovish decision would depend on whether inflation cools down. He emphasized that the decision would hinge on the “totality of the data, the evolving outlook, and the balance of risks.”
Since Powell’s comments, XRP’s price has declined by up to 15.35%, suggesting that many crypto traders are securing profits amid the rate cut uncertainties.
Ripple’s 1 Billion XRP Unlock Scare
Ripple has moved over a billion XRP in the past 24 hours as part of a scheduled fund release from escrow. Whale Alert captured a series of large transfers in and out of Ripple’s escrow wallet. As of August 2, 500 million XRP had been moved out of the escrow account in two tranches, increasing the supply on the market. If demand doesn’t rise to match this influx, it can exert downward pressure on prices.
However, Ripple may re-lock a significant portion of the newly released XRP, similar to its actions following the June 1 unlock. Notably, the company had re-locked 800 million XRP, while selling approximately 300 million XRP, valued at $182 million.
XRP Price Technicals: Bearish Divergence Sell-Off
Today’s XRP losses are part of a broader correction that followed a bearish divergence signal on the daily chart. A bearish divergence is confirmed when the price forms higher highs, but its momentum indicator—the relative strength index (RSI)—forms lower highs. This indicates that the price rise lacks sufficient upside momentum to continue, typically leading to corrections.
XRP has entered a similar correction cycle after topping out at a local high of around $0.658 on July 31, coinciding with the RSI’s lower high formation at 65.48. The rising daily volumes during the correction further indicate traders’ conviction in the down-move.
As of August 2, the XRP price was testing its 0.5 Fibonacci retracement level at around $0.571 as support, eyeing a rebound toward the next successive Fib line at around $0.607. Conversely, a break below the $0.571 support could lead to a test of the 50-day (the red wave) and 200-day (the blue wave) exponential moving averages (EMAs) as support, which are treading around the same level of $0.54. This level further aligns with the 0.382 Fib line.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
