Trending cryptocurrency, XRP, has entered a consolidation phase as its price struggles to maintain the $2.2 mark. Its movement has been nothing short of disappointing for investors who largely expected a price rally toward $3.
In the wake of this recent decline, investors have raised concerns, questioning why the Ripple-backed coin is plummeting today. It is important to note, however, that the decline is not an isolated event, the broader crypto marker is also facing a significant drop as we approach the end of the year.
Why is XRP Down Today
XRP often reacts to key events and developments including geo-political, and macroeconomic factors. The recent decline can be attributed to the recent rate cut by the United States Federal Reserve.
Following a 25 basis point interest rate cut by the Fed last week Wednesday, the crypto market was thrown into chaos as investors began selling off their holdings.
Chairman Jerome Powell also hinted at a more aggressive stance, indicating that lesser rate cuts would be implemented in 2025. Moreover, the central bank authority hinted at a cautious outlook for 2025, suggesting that only two cuts might be implemented next year as opposed to the previously forecasted four-quarter-point rate cuts.
This development affected investors’ sentiment as risky assets such as cryptocurrencies were impacted with a notable decline recorded within the week.
Another worthy mention is the upcoming SEC appeal-related opening brief in the Ripple lawsuit. The SEC is expected to file its opening brief before the January 15 deadline.
The regulatory uncertainty surrounding XRP has been one of the major factors influencing its trajectory. A favorable outcome in the lawsuit could mean a reversed trajectory aligning with investors’ expectations for the new year.
Analysts Remain Bullish
Amid the bearish sentiment, XRP analysts remain bullish about the coins’ future. Ali Martinez, popularly known as Ali Chartz on X, shared his XRP price prediction, stressing that if XRP can hold above $2.2, then a possible rally to $2.7 could be next.
Another analyst, Egrag Crypto, analyzed and predicted that XRP could close the year at $4.3 and skyrocket to between $13 and $27 in January 2025.
At press time, XRP traded at $2.20, representing a 0.68% increase in the last 24 hours. XRP is also up by 53.49% in the last 30 days.
XRP Chart | source: coinmarketcap
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