XRP Price Forecast: Selling Pressure Eases at $1 But XRP Still Risks a Major Drop

XRP (XRP) dropped by nearly 8% in the past 30 days after losing the $1 support briefly. Trading volumes are rising today as this could be an area of strong accumulation, but risks of a drop below this mark are still looming.

Volumes rose by 113% in the past 24 hours alone to nearly $1 billion, but are still relatively thin compared to historical figures, accounting for just 1.5% of the asset’s circulating market cap.

Inflation Dives in July and Odds of a Rate Hike Follow

The macroeconomic backdrop improved slightly last week as inflation in the United States retreated by 10 basis points, as analysts predicted.

This reduced the odds of an interest rate hike in September to just 30%. The market now believes that the Fed could postpone its decision to raise rates until December.

The market could take a breather and rally a bit off these lows as a result of this shift in investors’ expectations regarding monetary policy.

On Wednesday, another important piece of guidance regarding this topic will be released, as the market will get to take a peak at what was discussed during the last FOMC meeting via the Fed’s minutes.

These minutes could provide clearer evidence of what the Fed plans to do and the overall tone of the discussions that were held to analyze how pressure could be rising within the central bank to raise rates either sooner or later than expected.

XRP ETFs Head to Third Month of Consecutive Declines

For now, we are seeing persistent weakness in the market’s interest in XRP, as net inflows exchange-traded funds (ETFs) linked to these tokens have been dropping for three months in a row.

A simple run rate of this metric predicts only $6 million inflows by the end of this month, resulting in a 78% decline compared to last month and a much more dramatic 95% drop compared to May — the best month of this year thus far for XRP ETFs.

Weak interest like this reflects poor expectations regarding the project’s growth potential despite some potentially favorable drivers like the approval of the Clarity Act.

Turning to on-chain metrics, we are seeing an interesting spike in daily active addresses that could indicate ongoing accumulation at $1.

In addition, net inflows to exchanges have declined significantly but the price has not retreated, which could mean that these sales have been successfully absorbed by buyers who have the expectation that XRP could bounce off $1.

XRP Could Bounce Off $1 and Rally 30%

If active addresses rise past 200,000, this could mark the beginning of a strong recovery, as it had in the past.

Looking at the daily chart, the next stop could be the $1.15 first if that rebound occurs. Meanwhile, a move above that mark could set the stage for a stronger rally to $1.30, meaning a 30% upside potential in the near term.

However, the risk of a drop to $0.65, which has been our bearish target for the token for a while, is still looming. For now, the Relative Strength Index (RSI) favors a negative outlook at 37.

However, if the oscillator manages to rise past the signal line and above 40, this could mark the beginning of a trend reversal toward the targets mentioned earlier.