XRP has lost 16% of its value over the past seven days, making it one of the worst performers among the top 10 cryptocurrencies. The token is now approaching the psychological $1 support level, a critical juncture that could determine its near-term trajectory.
The decline comes amid a deteriorating macroeconomic backdrop. October's core Consumer Price Index rose 0.3% month-over-month, exceeding economist forecasts by 0.1 percentage points. This inflation surprise has reinforced expectations that the Federal Reserve may maintain a restrictive policy stance, with CME FedWatch data showing nearly 100% odds of a rate hike in December.
Federal Reserve Governor Christopher Waller has signaled support for stronger policy measures if inflation continues to accelerate. Higher interest rates increase borrowing costs and make traditional yield-bearing assets more attractive, reducing demand for risk-sensitive investments like cryptocurrencies.
Geopolitical tensions have added another layer of uncertainty. President Donald Trump reportedly stated that reaching an agreement with Iran was unnecessary, fueling concerns about Middle East instability. Oil prices moved higher on the comments, which could complicate the inflation outlook by raising transportation and production costs.
Market sentiment has turned sharply bearish. The Crypto Fear and Greed Index has fallen to 19, nearing the Extreme Fear category, a stark reversal from the Extreme Greed readings seen about two and a half months ago. Bitcoin briefly dipped below $68,000, and XRP is down 4% in the last 24 hours.
Despite the bearish price action, positive developments continue within the XRP ecosystem. A proposed lending protocol for the XRP Ledger has surpassed the 60% validator threshold. The system would allow lenders to deposit XRP or other supported tokens into a vault, with brokers issuing fixed-term loans to borrowers without collateral. The initiative could expand the network's financial applications, but it still needs backing from 29 of the 35 default validators for two consecutive weeks to activate.
Technical Outlook: Key Levels to Watch
XRP's technical picture has weakened considerably. On the daily chart, the token is approaching the final unfilled portion of a bullish fair value gap established in August. The $1 level now serves as a critical support area, with a key support at $0.98.
A sustained breakdown below $1 could open the door to price levels last seen before Trump's November 2024 election victory, potentially erasing much of the post-election rally. A decisive break below $0.98 could expose XRP to a deeper correction toward $0.50-$0.60 in the coming months.
If buyers successfully defend the $1 region, XRP could attempt a temporary recovery as traders respond to oversold conditions. However, a rebound would not necessarily confirm the end of the broader downtrend. For a more convincing recovery, the token would need to establish sustained buying momentum and reclaim previously lost resistance levels.
The first major resistance stands at $1.1150. A daily candle close above this level would allow XRP to extend its rally toward $1.31 in the near term.
This article is for informational purposes only and does not constitute financial advice.
