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XRP price retreated on Wednesday as a sea of red spread across the cryptocurrency industry ahead of the Federal Reserve’s decision.
Ripple (XRP) dropped by over 5%, erasing most of the gains made on Tuesday after the RLUSD stablecoin launch.
The decline led to significant liquidations of bullish positions, totaling over $15.19 million. Liquidations occur when exchanges automatically close positions due to insufficient margin. Short positions worth over $4.6 million were also liquidated, according to CoinGlass.
Ripple’s retreat, which was anticipated, happened a day after the company launched the RLUSD stablecoin. According to CoinMarketCap, the stablecoin has started well as it attracted over $53 million in assets. Its 24-hour volume was over $550,000.
The RLUSD stablecoin faces stiff competition in an already saturated market. Tether remains the dominant stablecoin, holding over 60% market share, followed by USD Coin, Ethena USDe, USDS, and Dai. Other notable stablecoins include First Digital USD and Justin Sun’s USDD.
History suggests that even high-profile stablecoin launches may struggle. For example, PayPal’s PYUSD has a market cap of $447 million despite the company’s massive fintech presence. Similarly, USDD, launched in 2022, has stalled at $745 million in the last two years.
XRP’s price retreat may reflect profit-taking after the RLUSD launch and nervousness about the Federal Reserve’s final interest rate decision for the year. Economists expect a “hawkish cut,” with the Fed reducing rates by 0.25% while signaling a potential pause in 2025. Concerns stem from inflationary policies under President-elect Donald Trump, such as deportations and tariffs.
Still, XRP has potential catalysts ahead. The new Securities and Exchange Commission may abandon its appeal and approve a spot ETF. Ripple Labs may also decide to file for an initial public offering.
XRP price may be forming risky patterns
The daily chart suggests XRP may be forming two risky patterns. First, it formed a shooting star candlestick pattern on Tuesday, which consists of a small body and a long upper shadow, often signaling a bearish reversal.
Also, XRP price may be forming a double-top pattern at $2.89. This pattern is marked by two peaks and a neckline, which lies at $1.8958, its lowest level this month.
As a result, there is a risk that XRP may continue to decline over the next few days as part of a mean reversion, given that it remains significantly above the 50-day moving average. More sustained gains would be confirmed if XRP price breaks above its year-to-date high of $2.89.
This article first appeared at crypto.news
