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▲ XRP, bear market/AI generated image ©
Amid fears of additional interest rate hikes by the U.S. Federal Reserve (Fed) and the burden of regular escrow release, XRP (Ripple) has been pushed to a critical juncture, falling to the key support level of $1.35.
According to cryptocurrency market data aggregator CoinMarketCap on September 2 (local time), XRP traded at $1.35, down 2.26% from 24 hours ago, showing a larger decline compared to the overall bearish market average. During the same period, the total cryptocurrency market capitalization decreased by 1.44% and Bitcoin (BTC) fell by 1.53%. XRP's decline surpassed that of Bitcoin, clearly demonstrating its high volatility (high beta) characteristic in a bear market.
The primary reason for this decline is the contraction in investor sentiment across all risk assets due to macroeconomic tightening concerns. According to the CME FedWatch Tool, the probability of a 25bp interest rate hike at the September Federal Open Market Committee (FOMC) meeting soared to 66.4%. This, combined with hawkish remarks from Fed Chair Kevin Warsh and a surge in international oil prices, exerted strong downward pressure on speculative assets. Experts analyze that the overall market is being weighed down by a macroeconomic risk-off trend rather than individual negative factors specific to certain coins.
Adding to this, Ripple's regular escrow unlock and the avoidance of altcoins fueled the weakness. Ripple released 1 billion XRP from escrow as scheduled on September 1st. While most of these tokens are typically re-locked, this action stimulated short-term supply pressure sentiment. Furthermore, as the altcoin season index dropped to 23, indicating the market's full entry into a Bitcoin season, investors undertook defensive portfolio adjustments, selling altcoins and moving funds into Bitcoin, which also had a negative impact.
From a technical analysis perspective, XRP is testing the $1.35 support level, where its recent swing low of $1.34 and the Fibonacci 78.6% retracement line are located. The daily Relative Strength Index (RSI) stands at 34.18, indicating continued downward momentum but approaching the oversold zone. Experts warn that if the $1.34 to $1.35 support area is defended over the next 48 hours, XRP could attempt a range-bound consolidation up to the $1.42 resistance level. However, if it falls below $1.34 on a daily closing basis, there is a risk of a further sharp decline to $1.27.
Market experts diagnose that despite robust fundamentals, such as record-high spot ETF inflows, macroeconomic fears and altcoin weakness are dominating short-term prices. The future direction of prices depends on whether the $1.34 support line can be held and if Bitcoin can regain a stable trend above the $77,000 mark. The U.S. August employment report and the September 11 inflation data are expected to be critical turning points, aligning with the Fed's policy path.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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