XRP fell to $2.88 on Tuesday, recording a loss of 3.95% in just 24 hours, surprising many traders with the sudden drop. Bitcoin and Ethereum both fell by 2.8% and 4.3% respectively during the same period.
According to statistics, after the decline, the market capitalization of XRP has dropped to $171.35 billion, and trading volume has increased by 1.72% to $6.87 billion. The chart for this token shows a sharp drop below $3.00, with the price momentum shifting to negative during the daytime trading session.
Why XRP Faces Selling Pressure
The direct cause of XRP's decline stems from broader economic concerns related to Home Depot's latest earnings report. Home Depot announced plans to raise prices on certain items to cope with tariff pressures. This is seen as a sign that inflation may occur at a higher-than-expected rate, and thus, a risk-averse sentiment has emerged in the financial markets.
The decline of XRP reflects concerns about how inflation affects cryptocurrency valuations. Rising inflation could hinder the Federal Reserve from easing interest rates, thereby reducing liquidity conditions that are typically favorable for digital assets. This change in outlook has led investors to reduce their holdings, resulting in a noticeable price weakness.
XRP Price Volatility
Trading data shows that XRP opened at over $3.00 before steadily declining throughout the day to $2.88, with no recovery above $2.95. The red trend line on the chart indicates increasing selling pressure despite a slight rise in overall trading volume, suggesting that selling is outpacing buying in the market.
However, the decline has pushed XRP down nearly 49% year-on-year, indicating that the long-term trend has not yet been erased. Nevertheless, recent developments affirm that macroeconomic factors remain the main drivers of short-term trading activity in the cryptocurrency market.
The sudden drop in XRP is directly related to inflation concerns, which have shaken investor confidence following Home Depot's pricing announcements. With macroeconomic signals weighing on investor sentiment, XRP and other cryptocurrencies remain vulnerable to rapid market corrections.
