XRP has fallen 3.53% in the past 24 hours and 7.54% over the past week.
This performance makes XRP one of the weakest cryptocurrencies among the 10 largest digital assets by market cap.
At the time of writing, XRP is trading at $1.10, up 0.08% since it opened early Wednesday in Asian trading.
XRP’s fall comes as crypto market sentiment has turned negative on rising inflation concerns.
The renewed conflict between the United States and Iran has sent global oil prices soaring by around 8% to 9%, sparking concerns that inflationary pressures could rise again.
The rise in oil prices has raised expectations that the US Federal Reserve (Fed) may maintain tight monetary policy or raise interest rates if inflation continues to rise.
This situation usually puts pressure on risky assets such as cryptocurrencies.
Fed Governor Christopher Waller also warned that if the Consumer Price Index (CPI) data to be announced shows a higher-than-expected reading, the Fed may be forced to raise interest rates.
At the same time, Fed Chairman Kevin Warsh believes that the development of artificial intelligence (AI) technology can increase economic productivity and help reduce inflation in the long term.
In addition to macroeconomic factors, XRP also received pressure from a technical perspective when it failed to defend the important support level of US$1.07.
The level was successfully defended for 158 days, but its breakthrough triggered a new wave of selling in the market.
CoinGlass data shows that the amount of long liquidation of XRP reached around $6.67 million in 24 hours, indicating that many traders who expected the price to continue to rise had to close their positions after the price drop.
After failing to defend the $1.07 level, the area has now become a new resistance level.
The nearest support level is now at $1.00, followed by $0.9980 and $0.7925 if the selling pressure continues.
Although the day also marked the third anniversary of XRP Victory Day, Ripple's landmark victory in a court case involving the US Securities and Exchange Commission (SEC), the positive sentiment has yet to overcome selling pressure driven by inflation concerns, rising oil prices and expectations of higher interest rates.
For now, the direction of XRP's price is expected to continue to be influenced by geopolitical developments in the Middle East, US inflation data and the Fed's monetary policy decisions in the near term.
