Ripple (XRP) Holds Above $3.00 Amid Fed Rate Decision Concerns
Ripple (XRP) maintained support above $3.00 on Wednesday, as market participants awaited the Federal Reserve’s (Fed) decision on interest rates. The market widely expects the central bank to hold interest rates steady in the 4.25% to 4.50% range. However, comments from Fed Chairman Jerome Powell are expected to provide insights into the future direction of monetary policy, shaping risk sentiment ahead of the next meeting in September.
US Government to Release Cryptocurrency Policy Report
A task force established by former U.S. President Donald Trump is set to release a policy report on virtual assets. The report will shed light on the White House’s stance on stablecoins pegged to the U.S. dollar, tokenization, and broader market legislation, among other critical issues affecting the digital asset industry.
This report represents the initial findings of the task force, fulfilling President Trump’s campaign promise to establish the U.S. as a global cryptocurrency hub.
Key areas of focus include recommendations for the U.S. Securities and Exchange Commission (SEC) to establish clear guidelines for the development of tokenized stocks and treasuries.
The task force, led by Bo Hines, includes Treasury Secretary Scott Bessent, SEC Chairman Paul Atkins, and Office of Management and Budget Director Russell Vought.
“While there have been regulatory regimes that have perhaps been fragmented or have allowed the industry to grow in certain ways, the recommendations that we expect to see in the report will be a good roadmap on how to develop crypto as an important part of the economy going forward,” said Rebecca Rettig, chief legal officer at Jito Labs, to Reuters.
The White House policy report follows the U.S. House of Representatives’ approval of key bills, including the GENIUS Act, signed by President Trump on July 18, the CLARITY Act, and the Anti-CBDC Act, which is now headed to the Senate for deliberation.
XRP’s price has remained relatively stable above the $3.00 support level in anticipation of the report. However, interest in the token has been declining, as evidenced by a notable drop in futures Open Interest (OI) to $8.57 billion from $10.94 billion on July 22.
This decline suggests a weakening of investor conviction in the bullish trend, with fewer traders taking long positions. This is reflected in the drop in volume to $10.6 billion from peak levels of $41.23 billion on July 18. If this trend continues, the recovery could be suppressed, increasing the likelihood of a bearish move below the $3.00 support level.
Technical Outlook: XRP Extends Consolidation
XRP is moving sideways above the $2.95 to $3.00 support range, with selling pressure limiting price movement at $3.32. Despite the decline in Open Interest and futures volume, bulls appear determined to initiate a trend reversal, targeting the all-time high of $3.66 reached on July 18.
The Relative Strength Index (RSI) shows signs of stabilization at 59 after falling from overbought territory over the past week. With the market no longer overheated, the anticipated recovery could be supported by positive risk sentiment following the Fed’s interest rate decision and the White House policy report.
However, traders should moderate their bullish expectations due to a sell signal triggered by the Moving Average Convergence Divergence (MACD) indicator on Friday. Investors may consider reducing their exposure if the blue MACD line remains below the red signal line. Should the decline accelerate below the $2.95 support, traders will shift their focus to the 50-day Exponential Moving Average (EMA) at $2.76 and the 100-day EMA at $2.54.
Cryptocurrency Metrics – Frequently Asked Questions
The developer or creator of each cryptocurrency decides the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted through mining, staking, or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its creation, a total of 19,445,656 BTC have been minted, which is the circulating supply of Bitcoin. On the other hand, the circulating supply can also decrease through actions such as token burning or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a particular asset by its current market value. In the case of Bitcoin, the market capitalization in early August 2023 exceeds $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the price of Bitcoin, which is around $29,600.
Trading volume refers to the total number of tokens of a specific asset that have been traded or exchanged between buyers and sellers within a set trading schedule, for example, 24 hours. Used to measure market sentiment, this metric combines all volumes from centralized and decentralized exchanges. Increased trading volume often denotes demand for a particular asset, as more people are buying and selling the cryptocurrency.
The funding rate is a concept designed to encourage traders to take positions and ensure that perpetual contract prices match those of spot markets. It defines an exchange mechanism to ensure that future prices and periodic price payments converge regularly. When the funding rate is positive, the price of the perpetual contract is higher than the market price. This means that traders who are bullish and have opened long positions pay traders who are in short positions. Conversely, a negative funding rate means that perpetual contract prices are lower than the reference price, so traders with short positions pay traders who have opened long positions.
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