XRP fell to $2.88 on Tuesday, recording a decrease of 3.95% within just 24 hours, surprising many traders with this sudden drop. Bitcoin and Ethereum both decreased by 2.8% and 4.3% respectively during the same period.

According to statistics, after the decline, XRP's market capitalization 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 downward momentum shifting to negative during the daytime trading session.

The Reasons XRP Faces Selling Pressure

The direct cause of XRP's decline stems from overall 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 market.

The decline of XRP reflects concerns about how inflation affects cryptocurrency pricing. Rising inflation could hinder the Federal Reserve from lowering interest rates, thereby reducing liquidity conditions that are typically beneficial for digital assets. This shift in outlook has led investors to reduce their equity stakes, resulting in significant price weakness.

XRP Price Volatility

Trading data shows XRP opened at over $3.00 before continually 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 increase in total trading volume, implying 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 overall economic factors remain the primary drivers of short-term trading activity in the cryptocurrency market.

The sudden drop of XRP is directly related to concerns about inflation, which has shaken investor confidence following the price announcement from Home Depot. With overall economic signals overwhelming investor sentiment, XRP and other cryptocurrencies remain vulnerable to rapid market adjustments.

Register for a Binance account to receive permanent trading fee rebates:

- New account registration link: https://accounts.binance.com/register?ref=Q2FSX523

- Referral code: Q2FSX523