XRP, the digital asset linked to Ripple, recorded a sharp decline in line with the broader cryptocurrency market, dropping below the $1.30 mark during London trading hours. This fall came after the token lost more than 4% within a 24-hour period, marking one of its weakest sessions in recent weeks.
Rising US inflation pressures risk sentiment
The decline in XRP followed the release of higher-than-expected US inflation figures. Official data showed that core consumer prices in September rose 0.3% month-over-month, outpacing analyst forecasts by 0.1 percentage point. Year-on-year, headline inflation accelerated from 3.4% in August to 3.7% in September, with higher energy costs driving renewed price pressures.
These inflation numbers prompted traders to reconsider their expectations for Federal Reserve policy. Analysts now estimate a 50% probability of an interest rate hike in October, doubling from 25% before the report. Higher borrowing costs tend to tighten financial conditions and reduce demand for riskier assets, making the environment more challenging for cryptocurrencies such as XRP.
The uptick in inflation has sparked renewed caution among investors, leaving digital assets vulnerable as interest rate expectations shift.
With sentiment undermined by the inflation data, XRP’s selling pressure intensified, causing the token to approach key technical support levels as traders digested the evolving macroeconomic backdrop.
ETF flows and long liquidations add further headwinds
XRP-related spot exchange-traded funds, a key source of market demand, recorded no net flows for three straight sessions. On Wednesday, these ETFs collectively registered a $740,410 inflow. Overall, buying and selling through these vehicles remained roughly balanced, offering little cushion against the recent sell-off.
Meanwhile, the broader crypto market experienced $889 million in long position liquidations over the last 24 hours, with approximately $14 million attributed to XRP. These liquidations heightened the volatility and risk for leveraged bullish traders, as further price declines could trigger additional forced selling.
| Asset | Long liquidations (last 24h) |
|---|---|
| All cryptocurrencies | $889 million |
| XRP | $14 million |
A rebound in ETF inflows would indicate renewed investor interest, but for now, the absence of strong buying has left XRP exposed to further selling.
During the same period, Evernorth, an XRP-focused treasury management company, debuted on Wall Street with its XRPN shares. The stock has underperformed since the latest inflation report, reflecting the difficulties facing assets tied to the crypto sector as investors adjust to the prospect of higher interest rates.
Mini dictionary: Evernorth is a treasury management company that manages crypto-linked reserves and offers financial products based on digital assets such as XRP.
Technical breakdown challenges short-term recovery
XRP’s technical setup weakened as the token fell below its 200-day Exponential Moving Average on Monday. This trend indicator is closely watched by traders to assess long-term momentum, and trading below it can signal a loss of underlying support.
The latest selling pushed XRP below its $1.32 support level. The next key downside target sits at $1.25, which analysts see as an important area for buyers to defend. If $1.25 does not hold, attention may turn to $1.10, though this would require sellers to break through the immediate support first.
The near-term path for XRP will likely depend on whether buyers can step in at $1.25. Sustained market demand and a stabilization in macro conditions would be needed to reduce the risk of a deeper correction.
