Will XRP Still Be Bullish? Looking at Its Current Market Condition

XRP has recently exited its upward channel just days before the anticipated Federal Reserve interest rate decision on 7 May 2025. Many traders appear to be taking profits or exiting positions ahead of potential volatility. 

In this article, we break down the current support and resistance zones, analyse the Relative Strength Index (RSI), and explain why rate decisions impact short-term crypto movement, especially in large-cap assets like XRP.

XRP Price Breaks Out of Uptrend as Traders Brace for Volatility

Looking at the daily XRP chart, the asset had been climbing steadily inside a parallel upward channel since early April. 

This pattern, shown by two rising green lines, suggested controlled buying momentum with higher highs and higher lows. However, recent red candles indicate that XRP has decisively broken below this rising trend.

The break came after several days of sideways consolidation. XRP failed to hold its upper channel and closed below the midline, followed by a strong downward move that pierced the lower boundary. This signals the end of the short-term bullish phase for now.

A key support zone now sits at approximately $2.06, marked by a red horizontal line. This area has previously served as a base for rebounds, and if XRP falls further, this price will be the next line of defence. A break below this could open the door to sharper declines.

On the other side, resistance lies around $2.29, indicated by a green horizontal bar. This was the upper boundary of the previous move and represents the zone where sellers have historically gained control. 

Unless XRP reclaims and holds above this level, any short-term rally could face significant resistance.

The chart shows clear hesitancy, with increasing selling pressure as we move closer to 7 May. Investors may be exiting risk assets to avoid unpredictable price swings driven by macroeconomic news.

Read more: Bug Appears in XRP Wallet

RSI Shows Weakening Momentum and Investor Uncertainty

The Relative Strength Index (RSI) on the chart is currently around 43.5, sitting below the neutral 50 line. 

This suggests that bearish momentum is gaining ground. More importantly, the RSI had been rising during the earlier part of April, supporting the price rally. But now, it has started trending downward in parallel with the price, a sign of fading buying strength.

An RSI above 70 typically signals overbought conditions, while an RSI below 30 is considered oversold. XRP’s current level suggests that although the market is not yet oversold, it is certainly no longer strong. The RSI downturn reinforces the bearish break from the rising channel.

What this tells us is that traders are no longer confident enough to push XRP higher. The lack of strong RSI support also means any bounce from the $2.06 support could be temporary unless it comes with renewed volume or a strong external catalyst.

In this case, that catalyst could be the Fed’s interest rate decision. Scheduled for Wednesday, 7 May 2025, at 18:00 UTC, the Federal Reserve is expected to keep rates at 4.5%, according to market consensus. 

However, it is not the number itself that moves the markets, it’s the tone of the announcement and the subsequent press conference at 18:30 UTC.

Crypto markets are particularly sensitive to these events because interest rates affect investor appetite for risk. 

Higher rates often reduce liquidity in markets, pushing investors toward safer, yield-bearing assets. Lower rates, or dovish commentary, tend to drive more money into growth assets like cryptocurrencies.

Read more: XRP Prediction: Ripple (XRP) Price Forecasts for 2025-2050

Why Fed Decisions Trigger Volatility in Crypto Markets

When the US Federal Reserve adjusts interest rates, it does so in response to inflation, employment data, and broader economic trends. 

Even when rates remain unchanged, the accompanying policy statement and press conference can reveal the Fed’s stance, whether they’re more concerned about inflation (hawkish) or economic slowdown (dovish).

This is why markets often react strongly not just to the rate decision itself, but to the language used. 

For example, a surprise hint at future hikes could send XRP and other cryptocurrencies lower, as investors reallocate capital to safer assets. Conversely, a more cautious or easing tone might renew interest in risk assets.

In the days leading up to major central bank decisions, it’s common for traders to reduce their positions. 

This helps avoid being caught in unpredictable swings caused by news releases. The current XRP chart reflects this behaviour. The exit from the bullish channel, falling RSI, and increased selling activity point to a broader risk-off sentiment.

The forecast for the 7 May meeting is a hold at 4.5%, but traders know that it’s not guaranteed. Any unexpected comments about future rate hikes or balance sheet tightening could lead to a surge in volatility.

If the Fed signals a pause in rate hikes and expresses concern about growth, we might see XRP bounce from the $2.06 support and attempt to reclaim $2.29. But if the Fed leans hawkish, XRP could fall through support and revisit early April levels.

Conclusion

XRP’s recent price action reflects investor caution ahead of a key macroeconomic event. The asset has broken out of its rising channel, fallen toward a known support level around $2.06, and shows weakening momentum in its RSI. 

With the US Fed interest rate decision due on 7 May, traders appear to be staying on the sidelines to avoid exposure to volatility.

While XRP may resume its upward move if conditions stabilise, its current structure suggests that short-term caution is warranted. 

For those looking to stay active in the market while managing risk, Bitrue offers a secure and efficient platform to trade XRP and other assets with more control and transparency.

Frequently Asked Questions

1. Why does the Fed interest rate affect XRP?

Interest rate changes affect investor appetite for risk. Higher rates reduce liquidity and can drive crypto prices down, while lower rates tend to boost demand.

2.What are the key XRP levels to watch now?

Support is near $2.06 and resistance is around $2.29. A break below or above these levels could signal the next direction.

3. Is now a good time to trade XRP?

With major economic news approaching, it may be wise to wait or use platforms like Bitrue that offer better tools to manage trading risk.

Investor Caution 

While the crypto hype has been exciting, remember that the crypto space can be volatile. Always conduct your research, assess your risk tolerance, and consider the long-term potential of any investment.

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