XRP Price Forecast: Momentum builds despite elevated Fed rate hike bets
- XRP trades higher above $1.38 as bulls return, building on the 200-day EMA support.
- The US central bank is widely expected to tighten monetary policy on Wednesday, raising interest rates to the 3.75%-4.00% range.
- XRP retains a neutral-to-bullish outlook as the RSI climbs near 56.
Ripple (XRP) edges higher above $1.38 on Monday, rising alongside the broader cryptocurrency market. The remittance token bounced off its near-term $1.33 support level, prompting bulls to return ahead of a potential breakout attempt above the next supply at $1.40.
Volatility will likely stay elevated this week as the United States (US) Senate votes on the CLARITY Act on Tuesday, and the Federal Reserve (Fed) announces its monetary policy decision on Wednesday.
Fed rate hike odds remain high
Market participants are pricing in an 88% chance that the Fed will raise interest rates to 3.75%-4.00% on Wednesday, according to the FedWatch tool.
The central bank’s decision follows the release of the US Consumer Price Index (CPI) data on Friday, which remained steady at 3.4% in August, in line with consensus estimates, according to the Bureau of Labor Statistics (BLS).
With US inflation still running well above the Fed’s 2% target and persistent geopolitical tensions in the Middle East compounded by the lingering effects of earlier US tariffs, the odds of the Fed pursuing a more hawkish policy stance have increased.
Tighter monetary policy increases yields on risk-free assets like US Treasuries. As a result, investors often rotate capital out of speculative, high-volatility sectors, including cryptocurrencies and tech equities, into safer, yield-generating assets.
Moreover, rising interest rates elevate borrowing costs, dampen market liquidity, and curtail overall leverage, collectively weighing on demand and valuations across risk assets.
Technical analysis: XRP retains constructive bias
XRP holds above the 50-day, 100-day and 200-day Exponential Moving Averages (EMAs), respectively, which collectively suggest a constructive near-term bullish bias as price remains supported by the broader trend structure.
The RSI has cooled to around 56 from extreme overbought readings, hinting at a more balanced but still mildly positive momentum backdrop, while the Moving Average Convergence Divergence (MACD) stays marginally below zero with a negative reading, reinforcing that upside may progress in a more corrective, consolidative manner rather than a runaway trend.
On the downside, immediate demand is at the recent pivot area above $1.38, with firmer support at the 200-day EMA near $1.36, then deeper at the short-term trend marker, the 50-day EMA at $1.28, followed by the 100-day EMA at $1.25. As long as XRP defends these EMA layers, the technical tone favors consolidation above them, and any pullback toward the $1.36-$1.28 region would likely be viewed as a retest of underlying demand rather than a full trend reversal.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Open Interest, funding rate FAQs
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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