Ripple Price Prediction: XRP at risk of falling below $3.00 as market dynamics change
- XRP rises slightly amid broad consolidation above $3.00 ahead of the Fed’s decision on interest rates.
- A sharp decline in derivatives market Open Interest hints at the changing market dynamics amid risk-off sentiment.
- XRP’s technical structure offers mixed signals: the MACD indicator falling while the RSI steadies above the 50 midline.
Ripple (XRP) price is choppy, trading broadly sideways on Tuesday with support at $3.00 and short-term resistance at $3.20. Several attempts to erase the 16% decline from the money remittance token's record high of $3.66 have been subdued amid increasing selling pressure and fading bullish momentum.
XRP recovery stalls amid open interest slump
The correction from the all-time high, achieved on July 18, can be attributed to crypto prices taking a breather last week when Bitcoin (BTC) price dropped slightly below $115,000.
Other factors that may have contributed to the sell-off, which saw XRP price slide to $2.95 support, include possible profit-taking activities and a shift in market sentiment, especially with key United States (US) macroeconomic data release expected this week.
The US Federal Reserve (Fed) will make its decision on interest rates on Wednesday. While expectations are that the Federal Open Market Committee (FOMC) meeting will leave interest rates unchanged in the range of 4.25% to 4.50%, Fed Chair Jerome Powell’s speech will provide key insights into the central bank’s policy direction.
Still, this week, President Donald Trump’s reciprocal tariffs are expected to take effect on Friday — an event that could trigger volatility, which could explain the drop in interest in the broader cryptocurrency market.
“Trump’s August 1 tariff deadline, the FOMC meeting, and key U.S. employment data suggest a potentially volatile week for markets,” K33 Research highlighted.
The sideways price action observed with XRP in the last few days mirrors a noticeable drop in the futures market Open Interest (OI). After peaking at $10.94 billion on July 22, the chart below shows a persistent decline, averaging around $8.97 on Tuesday.
OI represents the notional value of outstanding futures or options contracts, with a decline in the indicator suggesting that trader conviction in the uptrend is faltering amid reduced leveraged bets on the price of XRP increasing in the short term.
XRP Futures Open Interest | Source: CoinGlass
Technical outlook: XRP technical indicators offer mixed signals
XRP bulls are walking on eggshells, with the price action capped under resistance at $3.20 while downside risks mount. The Moving Average Convergence Divergence (MACD) indicator confirmed a sell signal on Thursday when the blue line crossed below the red signal line.
Investors often consider reducing their exposure after identifying this signal, currently accentuated by the red histogram bars below the zero line.
Although the Relative Strength Index shows signs of stabilizing after falling from its overbought peak of 88, the overall trend is downward. In case the RSI extends the decline below the midline, indicating a reduction in buying pressure, the sell-off may continue below the short-term support range between $2.95 and $3.00.
XRP/USDT daily chart
The 50-day Exponential Moving Average (EMA) at $2.74 and the 100-day EMA at $2.53 could absorb the selling pressure, preventing the price from accelerating below the $2.50 level. On the flip side, the potential breach of resistance at $3.20 could bolster the uptrend toward the record high and perhaps the next key milestone at $4.00.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token. While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at. Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say. Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation. While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
Author
John Isige
FXStreet
John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren
