Ripple’s XRP dropped nearly 10% in the past day as the crypto market faced downward pressure. This downtrend, which has wiped 7% off the global market cap, followed a federal reserve rate cut and a significant outflow from Bitcoin-focused ETFs.
The Federal Reserve's announcement of a 0.25% rate cut, coupled with Jerome Powell’s cautious outlook for 2024, triggered a wave of selling in crypto markets. Data from CoinMarketCap shows that the overall crypto market capitalization is down 7% to $3.28 trillion.
Federal Reserve Sparks Market Selloff
While the rate reduction was widely anticipated, Powell’s suggestion of a pause in monetary easing caught investors off guard. Inflation concerns and uncertainty around fiscal policies added further pressure.
Adding to the turmoil, spot Bitcoin ETFs reportedly recorded massive outflows, with more than $600 million withdrawn in just 24 hours. High-profile ETFs like Fidelity’s FBTC and Grayscale’s BTC accounted for the biggest share, CryptoPotato reported, unsettling sentiment across the broader market.
After reaching a multi-year high of $2.80, XRP has dropped more than 20% in the weekly chart. The price drop highlights a broader market condition rather than Ripple-specific developments. The broader crypto market saw similar declines, with Bitcoin dropping toward $93,000 and altcoins like Dogecoin plummeting over 25%.
Optimism amid Uncertainty
While XRP’s recent performance might alarm short-term traders, many analysts remain optimistic about its long-term prospects. XRP’s challenges reflect the volatile nature of cryptocurrency markets, influenced by macroeconomic trends and investor sentiment.
As Ripple expands its ecosystem, particularly with initiatives like its Ripple USD (RLUSD) stablecoin, the company could have positioned itself for growth in the next bull cycle.
Market analysts have cited monetary and fiscal policies as catalysts for future crypto adoption. Despite short-term volatility, XRP’s fundamentals and market position remain robust.
Its use case as a bridge currency and its growing adoption among financial institutions could propel it toward new heights. Whether the token achieves the ambitious $5 or $10 targets depends largely on broader market conditions and Ripple’s continued innovation in the space.
Meanwhile, the SEC granted approval to two major Bitcoin and Ether exchange-traded funds (ETFs) today (Friday). The approved funds are the Hashdex Nasdaq Crypto Index US ETF and the Franklin Crypto Index ETF.
According to the regulator’s statement, the Hashdex ETF will track Bitcoin and Ether, while the Franklin ETF will reportedly focus on the Institutional Digital Asset Index, a benchmark covering both Bitcoin and Ether.
This article was written by Jared Kirui at www.financemagnates.com.
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