XRP’s price is down today as traders de-risk after Jerome Powell’s hawkish address at Jackson Hole.
XRP’s price is down today, mirroring trends elsewhere in the cryptocurrency market as investors de-risk after Federal Reserve Chairman Jerome Powell’s hawkish statements at Jackson Hole.
BREAKING: Fed Chair Jerome Powell said the central bank is prepared to raise rates further if needed https://t.co/6i5vlTEPGa pic.twitter.com/20SR5aymNJ
— Bloomberg (@business) August 25, 2023
Rate hike suspense pressures XRP price lower
On Aug. 25, the XRP (XRP) price dropped 1.25% to $0.507, slightly underperforming the crypto market, whose capitalization fell 1% in the same period. This coincided with the U.S. Dollar Index (DXY) rising to a two-month high, suggesting investors are increasingly seeking safety.
Meanwhile, the market is currently mixed about the rate guidance. According to the CME FedWatch Tool, expectations about a rate pause in September remain firm. However, the probability of a rate hike in November has grown to 41% from 32% a month ago.
Whale dump alert
The days leading up to the Powell speech witnessed whales reducing their XRP exposure.
The XRP supply held by addresses with a balance of more than 1 billion tokens (black) fell to 39.21% from 41% a week earlier. Similarly, the supply held by the 10 million-to-100 million balance cohort has dropped 0.25% in the last four days.
Notably, one rich XRP investor moved 29.3 million XRP worth $15.13 million to the Bitstamp exchange, which should increase the supply available and potentially increase sell pressure.
More XRP losses ahead?
From a technical standpoint, the XRP/USD pair stares at more potential losses in the coming days or weeks.
Notably, XRP’s ongoing upward consolidation trend appears to be painting a bear flag. This is a classic bearish continuation pattern that forms when the price trends inside two rising, parallel trendlines after a strong move down (called flagpole).
The bear flag resolves after the price breaks below its lower trendline and falls by as much as the flagpole’s height, as shown above. Hence, the bears will hope for a possible flash crash toward $0.40 as its next downside target, or a 20% price decline by September.
Related: Bitcoin could be worth less than $20K in 2023, US inflation data says
However, the bulls will pin hopes on XRP’s daily relative strength turning oversold, raising possibilities of a short-term recovery toward the flag’s upper trendline. In this case, the XRP price has a bullish target of $0.54, or 6% gains, by the end of August.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.