XRP’s Price Dips as Traders De-Risk Following Jerome Powell’s Hawkish Address at Jackson Hole
The price of XRP has experienced a decline today, reflecting broader trends in the cryptocurrency market. This drop comes as investors engage in de-risking activities after Federal Reserve Chairman Jerome Powell delivered hawkish statements at the Jackson Hole symposium.
On August 25th, the value of XRP decreased by 1.25%, settling at $0.507. This performance slightly underperformed the overall cryptocurrency market, which witnessed a 1% decrease in capitalization during the same period. Notably, this dip coincided with the U.S. Dollar Index (DXY) reaching a two-month high, indicating an increasing preference among investors for safety.
The sentiment regarding interest rate guidance is currently mixed. According to the CME FedWatch Tool, expectations for a rate pause in September remain strong. However, the likelihood of a rate hike in November has risen to 41%, up from 32% a month ago.
Leading up to Jerome Powell’s speech, there was a notable reduction in XRP exposure among whales. The XRP supply held by addresses with a balance of over 1 billion tokens experienced a decline from 41% to 39.21% over the course of a week. Similarly, the supply held by the 10 million-to-100 million balance category dropped by 0.25% in just four days.
From a technical perspective, the XRP/USD pair seems to be signaling the potential for further losses in the days or weeks to come. The ongoing consolidation trend of XRP’s price appears to be forming a bear flag pattern. This classic bearish continuation pattern typically emerges when the price moves within two rising, parallel trendlines following a significant downward movement, which is often referred to as a “flagpole.”
The bear flag pattern usually resolves when the price breaks below the lower trendline and experiences a decline equal to the height of the flagpole, as illustrated above. Consequently, bearish investors might anticipate a potential flash crash towards $0.40 as the next downward target, which would amount to a 20% price decrease by September.
However, bullish investors may find hope in the potential for XRP’s daily relative strength indicator to become oversold. This could increase the likelihood of a short-term recovery towards the upper trendline of the flag pattern. If this scenario unfolds, the XRP price might target $0.54, representing a 6% gain by the end of August.
As with any investment decision, it’s important to remember that this information is not financial advice, and individual investors should conduct their own research and analysis before making any trading choices.