XRP (XRP), the token backed by Ripple, has been on a rollercoaster ride in recent times. After reaching a measured upside target of $1.15 last week, the token has been giving back gains. As of Friday, XRP’s price was already below its previous high, and I now expect the token to correct by up to 40% in the coming days.
Why I’m Bearish On XRP Right Now?
There are three major factors that are keeping me bearish on XRP: renewed geopolitical risks, a more hawkish Federal Reserve, and an ongoing bearish technical breakdown. Let’s break down each of these factors to understand why XRP’s chart is looking so painful to watch.
Renewed Geopolitical Risks
The renewed US-Iran conflict is once again threatening global energy markets, particularly amid concerns about shipping disruptions near the Strait of Hormuz. Oil and fuel markets remain vulnerable to supply shocks, with recent hostilities already contributing to sharp energy-price volatility. Higher oil prices can feed into broader inflation by raising transportation, manufacturing, and other energy-related costs. In turn, stubborn inflation gives the Federal Reserve less room to ease monetary policy. Higher-for-longer interest rates, or further hikes, typically reduce investors’ appetite for riskier assets. Cryptocurrencies sit firmly in that risk bucket, so another oil-led inflation shock could pressure Bitcoin and the broader crypto market, dragging XRP lower with them.
The Federal Reserve Is Turning Increasingly Hawkish
The macro backdrop is getting worse for XRP. Futures traders use 30-Day Fed Funds futures to price the probability of rate changes at upcoming Federal Reserve meetings, according to the CME FedWatch tool. As of this week, markets are assigning around a 60% probability to a September rate hike. The repricing comes as inflation concerns grow, with minutes from the Fed’s June meeting showing policymakers becoming more worried about price pressures. Higher rates make cash and interest-bearing assets relatively more attractive while draining liquidity from speculative markets. That is generally bad news for cryptocurrencies such as XRP.
XRP’s Bear Pennant Breakdown Targets $0.68
XRP’s three-day chart is flashing a major technical warning. The token has broken below a bear pennant, a bearish continuation pattern that forms when price briefly consolidates after a sharp decline. A breakdown usually signals that the previous downtrend may resume. The measured move puts XRP’s downside target near $0.68, roughly 40% below current prices near $1.10. XRP also remains below its 20- (green), 50- (red), and 200-period (blue) EMAs, while its three-day RSI sits near 39. Unless the token reclaims its 20-3D EMA near $1.18, the path of least resistance remains lower.
XRP’s bear pennant breakdown is a clear indication that the token is headed lower. The token’s inability to break above its 20-3D EMA near $1.18 is a major red flag. The token’s RSI is also sitting near 39, which is a sign of oversold conditions. However, the token’s inability to break above its 20-3D EMA near $1.18 suggests that the token is not yet ready to turn higher. As a result, I expect XRP’s price to continue to decline, potentially reaching a downside target near $0.68.
Conclusion
In conclusion, XRP’s chart is looking very painful to watch. The token’s inability to break above its 20-3D EMA near $1.18, combined with its bear pennant breakdown, suggests that the token is headed lower. Additionally, the renewed geopolitical risks and the Federal Reserve’s increasingly hawkish stance are also bearish for XRP. As a result, I expect XRP’s price to continue to decline, potentially reaching a downside target near $0.68.
