XRP has joined the broader cryptocurrency sell-off, briefly trading below the $1.30 mark during the London session after losing more than 4% of its value in the past 24 hours. The decline follows disappointing US inflation figures that have rattled risk assets across the board.
Data released on Wednesday showed core consumer prices rose 0.3% month-over-month in September, exceeding analyst expectations by 0.1 percentage point. Annual headline inflation also accelerated, climbing from 3.4% in August to 3.7% in September, driven largely by higher energy costs.
The hotter-than-expected print has prompted traders to reassess the Federal Reserve's monetary policy trajectory. Market participants now assign a 50% probability to an October rate hike, up from 25% prior to the release. Higher borrowing costs typically tighten financial conditions and dampen demand for speculative assets like cryptocurrencies.
For XRP, the shift in rate expectations has compounded existing selling pressure, bringing key support levels into sharper focus. The token's technical outlook deteriorated after it fell back below its 200-day Exponential Moving Average on Monday, a widely watched trend indicator that had previously signaled a potential recovery.
ETF flows remain flat
XRP-linked spot exchange-traded funds have recorded zero net flows for three consecutive sessions, though they saw a modest $740,410 inflow on Wednesday. The figures suggest that buying and selling through these products were broadly balanced, leaving little net demand to help absorb the latest market decline.
The broader cryptocurrency market has seen long liquidations totaling $889 million in the last 24 hours, with XRP accounting for roughly $14 million of that amount. Further price declines could increase pressure on leveraged bullish positions, potentially triggering additional liquidations and amplifying short-term volatility.
A return to positive ETF flows would more clearly indicate that investors are using the pullback to build exposure, but so far that signal has been absent.
Key support at $1.25
XRP's break below the $1.32 support level has put the next significant downside target at $1.25. This demand zone is seen as a crucial barrier against a deeper pullback. If sellers manage to push through $1.25, the next major support level could come into play around $1.10, though that scenario depends on sustained bearish momentum.
The immediate outlook hinges on whether buyers can defend $1.25 as inflation concerns weigh on sentiment. Sustained demand and a broader market improvement would be needed to reduce the risk of a deeper correction.
Separately, XRP treasury company Evernorth made its Wall Street debut during the week, with shares trading under the ticker XRPN. The stock has underperformed since Wednesday following the inflation release, reflecting the difficult backdrop facing crypto-linked investments as investors adjust their interest rate expectations.
This article is for informational purposes only and does not constitute financial advice.
