Reasons Why XRP Suddenly Dropped Sharply

XRP has fallen to $2.88 on Tuesday, recording a loss of 3.95% in just 24 hours, surprising many traders with the sudden drop. Bitcoin and Ethereum both fell by 2.8% and 4.3% respectively during the same period. According to statistics, after the fall, the market capitalization of XRP has decreased to 171.35 billion dollars, and the trading volume increased by 1.72% to 6.87 billion dollars. The chart of this token shows a sharp drop below 3.00 dollars, with the price momentum turning negative during the daytime trading session. Why Does XRP Have to Face Selling Pressure The direct cause of the decline in XRP comes from broader economic concerns related to Home Depot's latest earnings report. Home Depot announced plans to raise prices on some items to cope with pressure from tariffs. This is seen as a sign that inflation may occur at a higher than expected rate, and therefore, a risk-averse sentiment has emerged in the financial markets. The fall of XRP reflects concerns about how inflation affects the valuation of cryptocurrencies. Rising inflation could hinder the Federal Reserve from loosening interest rates, thereby reducing liquidity conditions that are typically favorable for digital assets. This shift in perspective leads investors to reduce their holdings, resulting in a notable weakening of prices. XRP Price Volatility Transaction data shows that XRP opened at over $3.00 before falling steadily throughout the day to $2.88, with no recovery above $2.95. The red trend line on the chart indicates increasing selling pressure despite a slight increase in overall trading volume, suggesting that selling is outweighing buying in the market. However, the recent fall has pushed XRP down nearly 49% year-on-year, indicating that the long-term trend has not yet been erased. Nevertheless, recent developments affirm that macroeconomic factors remain the main drivers of short-term trading activity in the cryptocurrency market. The sudden fall of XRP is directly related to inflation concerns, which have shaken investor confidence following Home Depot's pricing announcement. With macroeconomic signals weighing heavily on investor sentiment, XRP and other cryptocurrencies remain vulnerable to rapid market corrections.