XRP, one of the most popular cryptocurrencies, has hit a rough patch, struggling to hold onto the $2.20 mark. For investors hoping for a rally toward $3, this downturn has been disappointing. Many are wondering what’s behind the drop. However, it’s important to note that this isn’t just about XRP—most of the crypto market is facing challenges as the year comes to a close.

What’s Causing XRP’s Drop?

XRP’s price is often influenced by big events like economic changes and legal updates, and this time is no different. A major factor behind the recent dip is last week’s interest rate cut by the U.S. Federal Reserve.

The Fed reduced interest rates by 25 basis points, which caused a ripple effect across financial markets. As uncertainty grew, many investors began selling off risky assets like cryptocurrencies. Adding to the tension, Fed Chair Jerome Powell signaled that 2025 would see fewer rate cuts than expected, with only two planned instead of the anticipated four. This cautious stance has made investors wary, further dragging down the crypto market.

Another factor is the ongoing legal battle between Ripple (the company behind XRP) and the U.S. Securities and Exchange Commission (SEC). The SEC is set to file an appeal brief by January 15, keeping the regulatory cloud over XRP. A positive outcome in the case could potentially reverse its fortunes, but for now, uncertainty reigns.

Why Some Analysts Are Still Hopeful

Despite the current struggles, many analysts remain optimistic about XRP’s future. Popular crypto analyst Ali Martinez, known as “Ali Chartz,” believes XRP could rally to $2.70 if it manages to stay above $2.20.

Meanwhile, another analyst, Egrag Crypto, has a more ambitious outlook. They predict XRP could end the year at $4.30 and even soar to $13–$27 by January 2025.

At the moment, XRP is trading at $2.20, showing a slight 0.68% increase in the last 24 hours and an impressive 53.49% gain over the past month.

The Bigger Picture

While the recent drop has rattled some investors, the long-term potential of XRP continues to spark hope. Whether it’s regulatory clarity or market conditions, the coming months will play a big role in determining where XRP heads next. For now, investors are keeping a close eye on the $2.20 support level and the ongoing SEC case.

Sometimes, patience is key in the world of crypto.