XRP's price is highly correlated with the overall crypto market, which has been facing a risk-off sentiment due to global economic uncertainties. Recent U.S. Producer Price Index (PPI) data for July showed a 0.9% monthly increase—the largest in three years—reviving inflation fears and reducing expectations for aggressive Federal Reserve rate cuts in September. This triggered a $160 billion wipeout in crypto market capitalization, with XRP declining amid cascading liquidations totaling over $90 million in long positions. Tariffs announced by President Trump earlier in 2025 on goods from over 100 countries have also contributed to fears of a U.S. economic slowdown, prompting investors to lock in gains across risk assets like altcoins.
How to analyze this factor: Track macro indicators like PPI or Fed announcements via economic calendars. If rate cuts materialize, it could reverse the trend by making borrowing cheaper and boosting risk appetite. Historically, XRP has followed Bitcoin's lead during such corrections, as seen in April 2025 when tariffs caused a 45% drop from $3.20 to $1.80.
Profit-Taking After Post-Settlement Rally:
Following the resolution of the long-running SEC lawsuit against Ripple in early 2025 (with a $50 million settlement far below the $2 billion initially sought), XRP surged due to regulatory clarity and a 208% spike in trading volume to $12.4 billion. However, this led to natural profit-taking, with traders offloading positions after a 600% rally in Q4 2024. XRP has declined for multiple consecutive sessions, retracing much of its August 7 gains, as elevated volumes (still at $9.16 billion) indicate institutional exits rather than new buying
How to analyze this factor: Monitor on-chain data for large wallet movements (e.g., whales selling into strength) and liquidation volumes on platforms like CoinGlass. A similar pattern occurred in May 2025, where profit-taking after a rally caused a 7% drop over five days.
