XRP price bounced back on Wednesday as a sea of red spread across the cryptocurrency industry ahead of the Federal Reserve's decision.
Ripple (XRP) down more than 5%, erasing most of the gains made on Tuesday after the RLUSD stablecoin launch.
The downturn resulted in a significant liquidation of collateral positions, totaling more than $15.19 million. Liquidation occurs when exchanges automatically close positions due to insufficient margin. Short positions worth more than $4.6 million were also liquidated, according to CoinGlass.
Return of Ripple, which was expected, happened a day after the company launched the RLUSD stablecoin. according to CoinMarketCapthe stable is off to a good start as it attracted more than $53 million in assets. Its 24-hour volume was over $550,000.
The RLUSD stablecoin faces stiff competition in a saturated market. Tether remains the mainstay, with over 60% market share, followed by USD Coin, Athena USDe, USDS, and Dai. Other notable stablecoins include First Digital USD and Justin Sun's USDD.
History suggests that even launching a high-profile stable may struggle. For example, PayPal's PYUSD has a market cap of $447 million despite the company's large fintech presence. Similarly, USDD, which was launched in 2022, has stopped at $745 million in the last two years.
XRP's price reversal may reflect profit after the launch of the RLUSD and anxiety over the Federal Reserve's final interest rate decision for the year. Economists are expecting a “hawkish cut,” with the Fed cutting rates by 0.25% while hinting at a possible pause in 2025. Concerns stem from inflationary policies under President-elect Donald Trump , such as exports and taxes.
However, XRP has potential catalysts ahead. The new Securities and Exchange Commission may abandon his claim and ETF spot approval. Ripple Labs may also decide to file for an initial public offering.
XRP price may be forming dangerous patterns
The daily chart suggests that XRP may be forming two dangerous patterns. First, he created the Tuesday shooting star candlestick pattern, which has a small body and a long upper shadow, often indicating a bearish reversal.
Also, XRP price may be forming a double top pattern at $2.89. This pattern is marked by two tops and a neck, which lies at $1.8958, the lowest level this month.
As a result, there is a risk that XRP could continue to decline over the next few days as part of a retracement, as it is still well above the 50-day moving average. More sustained gains would be confirmed if the price of XRP breaks above the all-time high of $2.89.
