In an unexpected development, XRP has seen a significant drop in trading volume, leaving market participants in a state of speculation.
According to CoinMarketCap data, XRP volume has dropped 24% in the last 24 hours, reaching $1.78 billion XRP. For XRP, whose trading volume has recently hovered between $3 and $5 billion (a $3.5 billion volume in XRP was reported in the week), a $1.78 billion figure is a noticeable decrease.
While the exact reason behind the drop remains unknown, a few explanations might be likely. The crypto market is currently seeing slight profit taking with several crypto assets, including XRP, in the red. When the market sentiment turns cautious or bearish, trading volume across many assets, including XRP, tends to decline.
Traders appear to be taking a wait-and-see approach amid anticipation of volatility ahead of next week’s Federal Reserve policy meeting on May 6 and 7. Markets broadly expect the Fed to leave its benchmark short-term borrowing rate unchanged at the meeting, while they are pricing in a quarter percentage point cut in June with two or three more to follow by the end of the year.
XRP’s recent consolidation may have contributed to the decrease in trading volume. While the price of XRP has remained relatively stable, it has become unexciting recently, which may contribute to a slowdown in trades.
What’s next for XRP price?
At the time of writing, XRP was down 0.22% in the last 24 hours to $2.2, mirroring the slight drop in the broader crypto market.
While XRP is currently battling to stay above the daily SMA 50 at $2.187, a positive is that bulls have not given up ground yet.
The RSI just above the midpoint does not provide a clear advantage to either bulls or bears. Buyers would take control on a break and close above $2.6, which might pave the way for a rally to $3.
On the contrary, a break and close below the daily SMA 50 could sink XRP to the support at $2 near the daily SMA 200. This is a critical level to keep an eye on because a drop below $2 could pull the XRP price to $1.61.