XRP experienced a pullback in the near term, trading at $2.41 at the time of writing. The cryptocurrency has declined by 0.95% in the last 24 hours, and this comes after the asset also fell by 4.67% in the last week. Some analysts reckon that the present correction is purely technical, following a significant recovery from the lows seen in the first quarter of this year.
In 2024, XRP rose by more than 288% to trade at $2.90 at one point. After this extremely bullish move, there was a price correction, and according to the technical charts, the given asset has not yet entered the bear market. There are no lower lows or lower highs in the chart, which implies that the medium-term bullish trend is still intact.
Source: TradingView
Rate Cut Could Boost XRP
The next possible trigger for the further growth of XRP can be linked to the decision made by the Federal Reserve during its meeting on December 17-18. Financial markets expect a 0.25% rate cut from the central bank in its next meeting, which would be the third consecutive cut if that is possible.
The move came after inflation data remained steady, with the Consumer Price Index (CPI) increasing only 0.3% in the previous month. A rate cut will tell the market that the Fed is sure about the inflation situation and is willing to encourage more growth in the economy.
Source: Jesse Cohen
In the past, rate cuts have been good for cryptocurrencies such as XRP. The result is that low interest rates lead to the depreciation of the US dollar. Thus, investors turn to other assets, including digital currencies. This has often been seen as the key to stir price rises in the crypto market. As an example, after last week’s release of inflation data, the token rose by 21% within just a few days. If the Fed announces another rate cut, the same may happen to XRP, and the cryptocurrency could surpass the current levels of resistance.
Key Support and Resistance
From the technical point of view, XRP is currently testing the most important levels of support and resistance. According to analyst Arslan Ali, the first level of defence for XRP is at $2.36, which corresponds to the 50-day exponential moving average (EMA). This support level is important in containing short-term price direction.
If, however,the Ripple token can hold above $2.36, it may draw more buying pressure. A breakthrough the level above this could cause an increase in the market optimism and can result in the breakthrough of the current resistance levels.
Source: Chart by Arslan Ali
The main level of resistance for XRP is at $2.50. This level is important because it has acted as a resistance level for the token in the last number of weeks. A break above this level would probably open the way for more gains in the price of token. The next levels of resistance are found at $2.65 and $2.86. It could break out above $2.50 which could lead to other higher price levels being targeted. If the Ripple token is to rally past these levels, it could easily hit the $3 mark in the subsequent weeks.
Potential Price Reversal Risks
However, the cryptocurrency may be under more pressure if XRP loses the support at $2.36. The following support levels are at $2.22 and $2.04 in this case. Any price level below these could imply that the price may continue to reverse.
The price of XRP will continue to experience high fluctuations as the market awaits the decision of the Fed. Traders are watching carefully whether the token can stand above the current support and reach the next resistance level of $2.50. If the token is able to close above this critical level, it would imply a resumption of the upward trend, and the $3.00 level could be in sight.
However, XRP is still in the bullish zone even though its short-term performance may be shaky. XRP price will be greatly influenced by the Federal Reserve’s rate cut decision on whether it will be able to penetrate the current price range or not. If the market has a positive response to the Federal Reserve’s action, then the coin could rally and may even touch new heights by the time 2025 arrives.
Conclusion
XRP has experienced substantial volatility of late, with the token vacillating between support at $2.36 and resistance at $2.50 as bears and bulls battle for control. This oscillation comes on the heels of significant appreciation earlier this year, demonstrating that the digital asset is consolidating gains in the short run. Looking ahead, the Federal Reserve’s impending decision on interest rates looms large, with the potential to galvanize or derail XRP’s momentum. While further declines are possible as downward pressures persist, the underlying long-term uptrend and latent demand suggest that surpassing $3.00 by month’s end is plausible if macro conditions brighten for virtual currencies.
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FAQs
Is XRP a good investment right now?
Regardless of having a short-term retracement recently, the long-term outlook for XRP is still bullish, which makes it a good place to invest for those who do not mind holding the currency for a long time.
How will the Fed’s rate cut impact XRP?
Traditionally, rate cuts are bearish for the USD, and bullish for cryptocurrencies and Ripple’s XRP in particular, as investors seek to diversify away from the greenback.
What are the key support and resistance levels for XRP?
Ripple is struggling to hold its ground at $2.36, which is the 50-day moving average for the currency, and on the other hand, it is facing the barrier at $2.50. A jump over $2.50 may lead the price to $2.65 and $2.86.
What happens if XRP loses support at $2.36?
Should the price of XRP drop below $2.36, it might continue to decline with critical levels at $2.22 and $2.04 before a price change happens.
