XRP Today News: Federal Reserve interest rate cut expectations cool down, bulls lose control, falling below $1.40

On February 26, XRP was pressured due to the cooling of U.S. employment data and the Fed’s June rate cut expectations. During the day, it dipped from $1.4454 to $1.3862 and closed at $1.4027, down 2.16% for the day. Since the beginning of the year, U.S. Bitcoin spot ETF net outflows have totaled $2.52 billion, while U.S. XRP spot ETF saw net inflows of $70.26 million during the same period.

XRP Today: Employment Data Suppresses Fed Rate Cut Expectations

For the week ending February 21, initial unemployment claims in the U.S. rose from 208,000 to 212,000, below the market expectation of 215,000, indicating the labor market remains tight. A tight labor market suggests steady wage growth, potentially fueling demand-driven inflation, which may lead the Fed to maintain a hawkish rate stance, thereby suppressing leverage demand for risk assets like XRP.

Notably, the Producer Price Index (PPI) for January, released on February 27, could shift market sentiment. Expectations are for a 2.6% year-over-year increase, lower than December’s 3.0%. If PPI comes in below expectations, market expectations for a June rate cut may rise, boosting demand for risk assets.

Recent Fundamental Drivers for XRP

Positive Factors: Continuous inflows into XRP spot ETF, progress in the Market Structure Bill legislation, increased utility of XRP

Negative Factors: Strong U.S. employment data suppressing rate cut expectations, ongoing large outflows from Bitcoin spot ETF dragging overall market sentiment

Focus Points: Bank of Japan rate hike path (yen arbitrage unwind risk), geopolitical risks in US-Iran nuclear negotiations, progress in the bipartisan review of the Market Structure Bill

XRP ETF Contrasts with Bitcoin Outflows: Structural Divergence

Despite market sentiment being subdued, U.S. XRP spot ETF funds show resilience. On February 26, net inflows reached $50,000, following a $3.09 million inflow the previous day, with total net inflows since the start of the year reaching $7.026 million.

In contrast, U.S. Bitcoin spot ETF has experienced net outflows of $2.52 billion since the beginning of the year, exerting continuous selling pressure on the overall crypto market. This divergence indicates institutional investors are reallocating their holdings between XRP and Bitcoin, driven mainly by expectations of legislative progress on the Market Structure Bill and XRP’s increasing utility.

Analysts suggest that if XRP’s utility improves, ETF inflows continue, and legislative progress advances simultaneously, XRP could decouple from Bitcoin’s price and develop independent upward momentum in the medium to long term.

Technical Analysis: $1 is a Key Short-Term Support, $2 is a Mid-Term Target

(Source: TradingView)

Thursday’s correction caused XRP to break below the 50-day moving average ($1.6167) and the 200-day moving average ($2.0670), indicating short-term technical weakness. If the price can regain and hold above $1.50, bulls may challenge the 50-day MA, and a successful break could target the 200-day MA, signaling a potential trend reversal.

Short-term target (1–4 weeks): $1.00 (cautiously bearish)

Mid-term target (4–8 weeks): $2.00 (bullish, based on legislative progress and ETF inflows)

Long-term target (8–12 weeks): $3.00

FAQs

Why did XRP decline today?

U.S. initial jobless claims were below expectations, indicating a strong labor market, which reduces expectations for a June rate cut by the Fed. The hawkish rate outlook suppresses leverage demand for risk assets like XRP, and ongoing large outflows from U.S. Bitcoin spot ETF also dampen overall market sentiment.

What does the difference in fund flows between XRP ETF and Bitcoin ETF indicate?

Since the start of the year, U.S. XRP spot ETF has seen net inflows of $7.026 million, while Bitcoin spot ETF has experienced net outflows of $2.52 billion. This divergence suggests institutional investors are favoring XRP allocations, partly reflecting positive expectations for legislative progress on the Market Structure Bill and XRP’s increasing utility.

What is XRP’s mid-term technical target?

Analysts set the mid-term target (4–8 weeks) at $2.00, contingent on continued ETF inflows, legislative progress, and XRP successfully breaking above the 50-day moving average ($1.6167). If these conditions are not met, the key short-term support remains at $1.00.