XRP (XRP) price is down today, mirroring trends elsewhere in the cryptocurrencymarket as traders await the Federal Reserve rate decision in the week.
XRP price drops amid rising dollar strength
On July 24, XRP price dropped 8% to $0.68, underperforming the crypto market’s 3.5% decline on the same day. The XRP/USD pair declined amid growing expectations that the Fed would raise interest rates by 25 basis points in its July 25-26 meeting.
A higher rate environment is considered bad for cryptocurrencies like XRP. As a result, some traders have rotated out of high-cap cryptos to seek shelter in safer assets like the U.S. dollar, selling at the peak of the Ripple-led market rally on July 13.
For instance, XRP’s price climbed 75% on July 13 but was unable to extend its gains above $1. Since then, the token’s price has fallen by 28%. On the other hand, the U.S. dollar index (DXY) bounced nearly 2% in the same period.
Meanwhile, the correlation coefficient between DXY and XRP was -0.79 on July 24 compared to +0.25 on July 13, showing a greater likelihood of XRP dropping further if the dollar keeps rising in the coming months.
What’s next for XRP price in July?
From a technical standpoint, XRP has entered an overbought correction stage after its weekly relative strength index (RSI) climbed to 72, its highest level since April 2021, last week.
The bear scenario will have XRP price decline toward $0.59 in July or early August. This level was support during the July 2021-January 2022 session and is also the 0.236 Fib line of the token’s Fibonacci retracement graph (drawn from the $1.15-swing high to the $0.30-swing low).
Related: XRP price can fall 40% by September — Fractal analysis
Conversely, a decisive close above the 0.382 Fib line near $0.77 could have XRP retest $1 resistance to gain around 30% from current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.