Why is XRP price down today?
Ripple co-founder’s $10 million donation affects XRP price as broader market concerns, including interest rate forecasts, influence cryptocurrency trends.
XRP prices have recently dropped, making it one of the worst-performing top cryptocurrencies. In the last 24 hours, XRP has plunged by 5.3%, currently trading around $0.53 as of October 22. While the overall crypto market also saw a 3% decline, XRP's sharper fall has been tied to specific events and broader economic factors.
Kamala Harris Donation Triggers Investor Concerns
A significant factor behind XRP’s drop relates to Ripple co-founder Chris Larsen’s $10 million donation to U.S. presidential candidate Kamala Harris’s campaign. On October 21, Larsen confirmed that his donation was directed to Future Forward USA, a political action committee (PAC) backing Harris. This comes after a $1 million donation from Ripple in August, demonstrating ongoing financial support from Ripple executives for Harris's campaign.
However, this high-profile donation has raised concerns within the XRP investor community. Fears that the donation could be liquidated to fund campaign activities have caused skepticism. Investors worry about a potential sell-off of large quantities of XRP, which could negatively impact its price. An X user commented on the situation, stating, “The narrative ‘Ripple dumps XRP on holders’ has now become ‘Kamala dumps XRP on holders,’” reflecting the anxiety about how this donation might affect the cryptocurrency's market value.
This donation also revived discussions about the U.S. Democratic Party’s historically lukewarm stance on cryptocurrencies, particularly as many in the XRP community align more with decentralized financial philosophies. Some analysts pointed out that Kamala Harris and her fellow Democrats have not made significant public statements on crypto policies, leading to further uncertainty among XRP holders.
Federal Reserve Policy and Market Impact
Beyond specific XRP-related news, broader economic trends have also contributed to the currency’s decline. A major factor driving the cryptocurrency market's performance is investor speculation around U.S. interest rate policy. The Federal Reserve's recent signals indicate that interest rate cuts could be slower than initially anticipated due to a strong U.S. economy.
Dallas Federal Reserve President Lorie Logan stated in an October 11 speech, “If the economy evolves as I currently expect, a strategy of gradually lowering the policy rate toward a more normal or neutral level can help manage the risks and achieve our goals.” This suggests that aggressive rate cuts, which could have provided relief to financial markets, including cryptocurrencies, may not be imminent.
As a result, the U.S. 10-year Treasury yield spiked to its highest point in three months on October 22. This development has had a ripple effect, reducing the attractiveness of non-yielding assets like XRP. In times of rising interest rates, investors often prefer traditional assets that offer fixed returns, such as government bonds, over more volatile digital currencies.
Technical Analysis: Key Resistance Levels
From a technical analysis perspective, XRP is currently facing resistance at two important exponential moving averages (EMAs)—the 50-day EMA and the 200-day EMA, both hovering around the $0.55 mark. These resistances have prevented XRP from gaining upward momentum, and the token remains under selling pressure.
On the downside, XRP is testing the lower trendline of its ascending triangle pattern, with the $0.52 level acting as a crucial support point. If the price breaks below this trendline, it could push XRP toward $0.50, a psychological support level. However, if XRP manages to close above the 50-day and 200-day EMAs, it may rally toward $0.64, similar to the gains observed earlier this year in July, August, and September.
Future Outlook: Market Uncertainty and Potential Volatility
Looking ahead, XRP’s performance is likely to remain volatile. Much depends on external factors such as Federal Reserve policy decisions and the broader macroeconomic environment. The market is also closely watching the U.S. elections, given the Democrats' relatively cautious stance on cryptocurrency regulation. Kamala Harris’s lack of a clear position on crypto, combined with ongoing concerns about large-scale XRP sales tied to the donation, may continue to weigh on investor sentiment.
While the XRP community waits for greater clarity, technical indicators point to the potential for both upward and downward price movements. For now, the immediate resistance levels at the $0.55 mark and the $0.50 support level will be critical areas to watch for traders and investors alike.
In summary, XRP's price drop can be attributed to a combination of Ripple’s co-founder’s donation to a political campaign, market skepticism about the Democratic Party's crypto stance, and broader economic factors such as interest rate projections. Whether XRP can recover in the coming weeks will depend on how these dynamics unfold, particularly around the U.S. presidential election and Federal Reserve policies.
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