XRP Plunges Amid Tariff Uncertainty and Market Volatility

XRP is experiencing a downturn, trading around $2.17 as of Friday. Market instability stems from reports that a court has temporarily lifted a previous block on President Trump’s tariffs.

Should this downward trend persist, XRP could fall below the $2.00 mark. Meanwhile, the Bureau of Economic Analysis (BEA) released the U.S. Personal Consumption Expenditures (PCE) Price Index for April, indicating a cooling inflation rate compared to March.

U.S. Core PCE Price Index Hits 4-Year Low

The core PCE Price Index, which excludes food and energy, decreased to an annual rate of 2.5% in April, the lowest since March 2021, meeting market expectations. This suggests a milder inflation outlook compared to March’s 2.7%. The overall annual PCE rate was 2.1%, below the expected 2.2%. Month-over-month, both core and overall PCE increased by 0.1%.

Federal Reserve Chair Jerome Powell recently cautioned that tariffs could have long-term implications for inflation, hinting at a hawkish stance.

The softer inflation is unlikely to significantly boost confidence in global markets, including crypto, especially since a federal appeals court suspended a previous ruling blocking President Trump’s tariffs. The Wednesday ruling stated that the president had overstepped his authority, as Congress holds the constitutional right to regulate trade with other countries.

XRP Losses Deepen as Liquidations Surge

XRP’s sharp decline has extended losses from its recent high of $2.65. Leveraged traders were hit hard by the sell-off to $2.17, with liquidations totaling $30 million in both long and short positions.

Long traders bore the brunt of the liquidations, losing approximately $29.75 million compared to around $384,000 in short positions.

A more than 10% increase in the Open Interest (OI) of derivatives to $4.2 billion in the last 24 hours, coupled with a 42% surge in trading volume to $6.3 million, indicates growing volatility.

This situation, where OI is falling while volume and liquidations are rising, highlights trader uncertainty, often leading to deleveraging amid bearish market sentiment.

Technically, XRP’s downward pressure remains strong, supported by a sell signal from the Moving Average Convergence Divergence (MACD) indicator as it slides below the zero line (0.00). Traders often consider selling when the MACD blue line crosses below the red signal line, highlighting bearish momentum.

The bearish outlook is reinforced by the downward trend in the Relative Strength Index (RSI), approaching the oversold region.

Key areas of interest for traders include the 200-day Exponential Moving Average (EMA), likely offering support around $2.07, the demand zone at $1.80, and the April low at $1.61. On the upside, the 100-day and 50-day EMAs, situated above XRP’s price, act as resistance levels at $2.26 and $2.29. A trend reversal would focus on the recently tested highs of $2.65 and the psychological level of $3.00.

• XRP extends losses below $2.20 as tariff uncertainty worries investors.
• U.S. Core Personal Consumption Expenditure (PCE) Price Index for April meets expectations at 2.5%, down from 2.7% in March.
• XRP’s pullback shakes out weak hands, with liquidations reaching $30 million in the last 24 hours.
• A sharp 11% drop in Derivatives Open Interest, coupled with a 40% increase in volume, signals growing volatility ahead of the weekend.

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