XRP Price News: Key Support Holds, But Risk of a Drop to $1.20 Still Exists

XRP (XRP) has gone up by nearly 1% in the past 24 hours, and although this does not sound like much, this uptick has happened after the token hit a key support.

Buyers once again showed up to buy XRP at $1.30, a level that has acted as a strong bouncing pad for the altcoin multiple times in the past.

However, trading volumes are not yet indicating that this is a high-conviction move.

Market sentiment worsened in the past few days as the price of oil skyrocketed above $100 once again. The Strait of Hormuz continues to be closed, and negotiations between the U.S. and Iran seem to be going nowhere.

Investors fear that this could result in higher inflation down the road, and the prevalent view is that the Federal Reserve will not cut interest rates this year, unless the situation in the Middle East improves.

Analysts No Longer Expect a Rate Cut in 2026

Data from FedWatch confirms this, as odds of a rate cut in June dropped from a previous level of around 46% to 4% at the time of writing.

As a result, market sentiment failed to recover, and investors are once again in “Fear” mode as indicated by the Fear and Greed Index.

For most altcoins, including XRP, this has been a tough year. Thus far, the latter has accumulated a 27% year-to-date drop, quite similar to the retreat that competing altcoins like Ethereum (ETH) and BNB (BNB) have experienced during this same period.

Despite the drop, on-chain data from Artemis indicates that transaction volumes within the XRP Ledger have been rising since the year started. According to this provider, weekly transaction volumes ended last week 70% higher than they were during the last week of December.

Higher network usage could indicate growing adoption of the XRP Ledger across the globe as Ripple continues to move forward with the deployment of its enterprise cross-border payments solutions.

The project has secured multiple licenses to operate in key countries in the Middle East, which could be particularly advantageous if large investors decide to turn to the blockchain to secure the assets at a time of geopolitical distress.

That said, for the first time since its launch, the market cap of Ripple USD (RLUSD), the network’s native stable asset, has retreated from a recent peak of $1.58 billion to $1.28 billion.

XRP Eyes Drop to $1.20 If This Key Support Falters

Looking at the 4-hour chart, we can clearly see how XRP bounced twice off the $1.30 mark in the past 3 days.

This has formed a double-bottom pattern at a key level that could anticipate a strong recovery for the token. If that’s the case, the key resistance to watch would be the $1.37 area, as a break above this threshold would invalidate the token’s bearish price structure.

That said, the odds still favor a bearish outlook, especially at a point when macroeconomic headwinds are quite strong. If XRP breaks below the $1.30 mark, we could see it plummet to $1.20 shortly afterward, meaning an 8% downside risk.