XRP is facing significant selling pressure, with the token value dropping 5.3% in the past 24 hours. According to market data, this decline is greater than both Bitcoin and Ethereum, which both fell by 3.3% during the same period.
At the time of writing, XRP is priced at $3.11, down 3.45% for the day. The trading session opened at nearly $3.2474 before a strong sell-off in the afternoon pushed the price down to around $3.10, and it has since fluctuated within a narrow range.
According to data from the Bureau of Labor Statistics, the U.S. Producer Price Index (PPI) rose 3.7% in July. This increase surpassed the average forecast of economists at 3% and was up from 2.6% in June. The 0.9% increase from the previous month is the largest in over three years, signaling persistent inflation.
The stronger-than-expected index has changed investor sentiment by reducing the likelihood that the U.S. Federal Reserve (Fed) will soon cut interest rates. Risky assets, including cryptocurrencies, have been affected by a wave of profit-taking as traders prepare for a longer period of higher borrowing costs.
Inflation data causes XRP price drop
Market analysts indicate that the prolonged impact of tariffs could be a driving force behind the recent surge in inflation. High producer prices could lead to greater price pressures, complicating the Fed's path to easing policy.
XRP had a price increase earlier this year due to expectations of interest rate cuts. However, new inflation data has dampened that outlook and triggered a wave of sell-offs across major cryptocurrencies.
According to data from CoinMarketCap, XRP's sharpest decline occurred right after the inflation report was released. The price volatility almost mirrors the downturn in the entire cryptocurrency market, indicating how macroeconomic data can affect the pricing of digital assets.
With inflation risks still being monitored, traders are likely to remain cautious. Market participants will continue to watch economic indicators that could shape expectations for monetary policy and, consequently, guide XRP's price in the short term.