XRP (XRP-USD) traded around $2.64 on Tuesday as investors braced for the Federal Reserve’s interest-rate decision, one of the biggest macro catalysts left this quarter. The outcome could set the tone for the next major move across crypto markets.
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Markets widely expect a 25-basis-point cut to the 4.00%–4.25% range, the second reduction this year, as the Fed tries to support growth without reigniting inflation. XRP’s price action has tightened between $2.50 and $2.80 for most of October, reclaiming its 200-day moving average near $2.60. This is a sign that underlying support remains firm even as volumes cool.
Dovish Powell Could Send XRP Back Into Rally Mode
If Chair Jerome Powell strikes a supportive tone and signals more easing ahead, analysts say XRP could finally clear the ceiling that’s capped its rallies for weeks. A clean break above $3.00 could open a path to $3.20–$3.50 as sentiment rebounds and traders rotate back into high-beta altcoins.
“The fluctuating macroeconomic backdrop is the dominant driver of this crypto cycle,” said Thomas Perfumo, global economist at Kraken. “A 25bps cut this week appears highly probable, and the market is already pricing in another by December. But the October 10 sell-off underscored how exposed crypto and risk assets remain to exogenous shocks.”
Perfumo’s point tells us how sensitive XRP and other digital assets are to changes in Fed policy. When borrowing costs fall, investors tend to move money back into higher-risk assets like crypto, which can fuel rallies. But when uncertainty rises or liquidity tightens, that same enthusiasm can fade quickly.
Hawkish Surprise Could Deflate Momentum
But a firmer message from Powell could flip the mood quickly. If the Fed emphasizes inflation risks or delays further cuts, XRP’s support near $2.40 could be tested fast. A deeper pullback toward $2.20–$2.30 remains possible, especially with derivatives markets heavily positioned toward leveraged longs.
“Liquidity is tightening,” said Alice Li, partner at Foresight Ventures. “Early signs of U.S. regional bank stress could push the Fed to pause QT sooner, but inflation risks keep policymakers cautious. BTC extended its drawdown and altcoins sold off broadly as CEX order-book liquidity fell to around 40% of pre-drop levels.”
For XRP, thinner order books usually mean sharper moves around the Fed decision. A dovish signal could lift prices faster because there’s less selling depth to absorb buys. A hawkish tone could cut the other way and push XRP down more quickly if bids thin out. In short, tighter liquidity magnifies whatever the policy message is.
Macro Crosscurrents Keep Traders Guessing
Beyond the Fed, traders are watching for any signs of stress in regional banks or liquidity strain that could influence risk appetite. Broader crypto markets have steadied after October’s flash sell-off, but volume remains thin and order books shallow.
For XRP, the next move hinges on whether Powell’s remarks open the door to further easing or keep the market waiting. A dovish pivot could finally lift it above the $3 handle, while a cautious tone might leave it treading water a little longer. So essentially, XRP’s next big swing may not depend on Ripple news at all but on how far the Fed is willing to go to loosen policy.
At the time of writing, XRP is sitting at $2.6566.
