XRP price retreated on Wednesday as a sea of red spread across the cryptocurrency industry ahead of the Federal Reserve’s decision.
Ripple (XRP) dropped by over 5%, erasing most of the gains made on Tuesday after the RLUSD stablecoin launch.
The decline led to significant liquidations of bullish positions, totaling over $15.19 million. Liquidations occur when exchanges automatically close positions due to insufficient margin. Short positions worth over $4.6 million were also liquidated, according to CoinGlass.
Ripple’s retreat, which was anticipated, happened a day after the company launched the RLUSD stablecoin. According to CoinMarketCap, the stablecoin has started well as it attracted over $53 million in assets. Its 24-hour volume was over $550,000.
The RLUSD stablecoin faces stiff competition in an already saturated market. Tether remains the dominant stablecoin, holding over 60% market share, followed by USD Coin, Ethena USDe, USDS, and Dai. Other notable stablecoins include First Digital USD and Justin Sun’s USDD.
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History suggests that even high-profile stablecoin launches may struggle. For example, PayPal’s PYUSD has a market cap of $447 million despite the company’s massive fintech presence. Similarly, USDD, launched in 2022, has stalled at $745 million in the last two years.
XRP’s price retreat may reflect profit-taking after the RLUSD launch and nervousness about the Federal Reserve’s final interest rate decision for the year. Economists expect a “hawkish cut,” with the Fed reducing rates by 0.25% while signaling a potential pause in 2025. Concerns stem from inflationary policies under President-elect Donald Trump, such as deportations and tariffs.
Still, XRP has potential catalysts ahead. The new Securities and Exchange Commission may abandon its appeal and approve a spot ETF. Ripple Labs may also decide to file for an initial public offering.
XRP price may be forming risky patterns
XRP price chart | Source: crypto.news
The daily chart suggests XRP may be forming two risky patterns. First, it formed a shooting star candlestick pattern on Tuesday, which consists of a small body and a long upper shadow, often signaling a bearish reversal.
Also, XRP price may be forming a double-top pattern at $2.89. This pattern is marked by two peaks and a neckline, which lies at $1.8958, its lowest level this month.
As a result, there is a risk that XRP may continue to decline over the next few days as part of a mean reversion, given that it remains significantly above the 50-day moving average. More sustained gains would be confirmed if XRP price breaks above its year-to-date high of $2.89.
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