XRP Price News: Key Support Holds, But Risk of a Drop to $1.20 Still Exists

Key Points

• Analysts no longer expect that the Fed will cut rates this year.
• Transaction volumes within the XRP Ledger have spiked this year.
• XRP could still drop by another 8% if bulls fail to defend the $1.30 support.

Market Overview

XRP (XRP) has experienced a nearly 1% increase in the past 24 hours, following a bounce off a critical support level at $1.30. This level has historically served as a strong support for the altcoin.

Despite this uptick, trading volumes do not indicate a strong conviction in the move. Market sentiment has deteriorated recently, particularly as oil prices surged above $100, exacerbated by geopolitical tensions in the Strait of Hormuz and stalled negotiations between the U.S. and Iran. Investors are concerned that these factors could lead to higher inflation, which has contributed to the prevailing belief that the Federal Reserve will not cut interest rates this year unless the geopolitical situation improves.

Analysts' Expectations

According to data from FedWatch, the probability of a rate cut in June has plummeted from approximately 46% to just 4%. This shift in expectations has further fueled a sense of fear among investors, as reflected in the Crypto Fear and Greed Index.

Year-to-date, XRP has seen a 27% decline, mirroring the performance of other altcoins like Ethereum (ETH) and BNB. However, on-chain data from Artemis indicates a significant increase in transaction volumes on the XRP Ledger, with weekly transactions rising 70% compared to the last week of December. This uptick may suggest growing adoption of the XRP Ledger as Ripple advances its enterprise cross-border payment solutions.

Price Analysis

On the 4-hour chart, XRP has formed a double-bottom pattern at the $1.30 mark, which could signal a potential recovery. The key resistance level to monitor is at $1.37; a break above this level could invalidate the current bearish outlook. However, the prevailing macroeconomic challenges suggest a bearish bias, and if XRP falls below $1.30, it could drop to $1.20, representing an 8% downside risk.