XRP has seen a significant decline in recent weeks, losing almost 30% of its recent gains and struggling to hold above the $2 mark. This drop has raised concerns among investors.
After a strong rally that saw XRP soar to new highs above $2.7, the cryptocurrency has lost steam and slipped below the key support at $2. This drop of nearly 30% from recent highs has left investors wondering what's next for XRP and whether the cryptocurrency will continue to fall in the coming days or weeks.
Several factors could be contributing to this XRP price decline, including both internal and external aspects that are impacting the token's price performance. Here's a closer look at some of the key points.
Upcoming Token Unlocking and Macroeconomic Pressures
One of the main factors impacting XRP's price is the upcoming monthly token unlock, which is scheduled for January 1, 2025, as part of Ripple's operational funding strategy. During this event, Ripple will unlock 1 billion XRP tokens, which are then sold to help fund the company's operations. In the past, these large sales of tokens have created selling pressure on the cryptocurrency, leading to price drops or making it difficult for XRP to sustain higher prices.
Moreover, the broader macroeconomic conditions are also influencing XRP's price movements. The U.S. Federal Reserve recently adjusted its monetary policy, lowering its expectations for rate cuts in 2 surprising move, and signaling a more extended period of high-interest rates. This shift in the central bank's stance has created a more cautious outlook for 2025, with higher overall uncertainty in financial markets, which is impacting risk assets like XRP.
XRP's Future Price Outlook: Can It Still Rally?
Despite XRP's recent struggles to hold onto its key support level at $2, some analysts suggest that the cryptocurrency may be entering a consolidation phase, similar to the one observed in early 2024, which ultimately led to a strong recovery in November. If XRP can break through the resistance at $2.73, there could be a potential rally toward $3.00, and even a possibility of a new all-time high above $3.31.
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