- XRP approaches key support level as demand declines due to Fed rate hike risks:

Ripple (XRP) continues to face significant selling pressure, trading at around $1.05 as of the time of this report on Wednesday. This decline reflects the overall weakness in the cryptocurrency market, exacerbated by growing macroeconomic challenges and ongoing geopolitical uncertainty.
If the current correction continues, XRP risks revisiting the critical support level of $1.00, a level not tested since November 2024.

- Fed rate hike probabilities increase amid geopolitical uncertainty:
Market participants expect a higher probability of the Federal Reserve raising interest rates during its September policy review. According to the CME FedWatch Tool, the probability of interest rates being above current levels in September rose to 70%, up from 44% a week ago. This probability had decreased to just over 50% at the time of writing.
FedWatch Tool | Source: CME Group
The headline inflation rate rose to 4.2% year-over-year in May, according to the latest Consumer Price Index (CPI) data, up from 3.8% in April, a level not seen in over three years.
In a press conference held on June 17 following the meeting, Federal Reserve Chairman Kevin Warsh affirmed the central bank's commitment to its goal of maintaining a 2% inflation rate and achieving price stability. This increasingly hawkish tone reinforced expectations of a rate hike, after expectations had been low throughout the first quarter of the year.
Meanwhile, the US and Iran remain at odds over the narrative surrounding the nuclear talks. President Donald Trump insists that Iran agreed to very strict inspections, while Iranian officials claim that nuclear issues were not discussed in detail during the latest round of negotiations.
The broader cryptocurrency market remains under severe pressure with a decline in risk appetite. According to the Fear and Greed Index, fear peaked at 17 points on Wednesday, down from 23 points the previous day. This risk aversion may continue to limit recovery potential.
Cryptocurrency Fear and Greed Index | Source: Alternative
Demand for XRP in the retail market has declined, as evidenced by the drop in open interest for perpetual futures to $2.58 billion on Wednesday, compared to $2.69 billion the previous day. The current open interest level is negligible compared to the record high of $10.94 billion in July, which coincided with XRP reaching its all-time high of $3.66. The continued weakness in the derivatives market means lower liquidity and constrained growth opportunities.
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