XRP Price Declines as RLUSD Market Cap Reaches $53M and Liquidations Surge

XRP’s price faced a decline on Wednesday as a downturn spread across the broader cryptocurrency market, particularly ahead of the Federal Reserve’s impending decision on interest rates. The XRP token dropped by more than 5%, erasing much of the previous day’s gains, which were seen following the launch of the RLUSD stablecoin.

The price dip led to significant liquidations, with over $15.19 million in long positions being liquidated. Short positions also faced liquidation, totaling over $4.6 million, as reported by CoinGlass. These liquidations occur when exchanges automatically close positions due to insufficient margin, reflecting the volatility in the market.

The decline in XRP’s price followed the launch of Ripple’s RLUSD stablecoin. The stablecoin has made a solid start, attracting over $53 million in market cap and recording a 24-hour volume of over $550,000, according to CoinMarketCap. However, RLUSD is entering a competitive space, with Tether remaining the dominant stablecoin with over 60% of the market share, followed by USD Coin, Ethena USDe, USDS, and Dai. Notably, even stablecoins from high-profile projects like PayPal’s PYUSD and Justin Sun’s USDD have struggled to gain traction, with market caps of $447 million and $745 million, respectively, over the past two years.

XRP’s price retreat may also reflect profit-taking following the RLUSD launch and market nervousness ahead of the Federal Reserve’s final interest rate decision for the year. The Fed is expected to make a “hawkish cut,” lowering rates by 0.25% but signaling a potential pause in 2025. The market is also dealing with broader economic concerns, including inflationary policies under President-elect Donald Trump, which could add uncertainty to market conditions.

Despite this retreat, XRP still has potential catalysts ahead. Ripple Labs may see approval for a spot ETF following potential changes in the Securities and Exchange Commission (SEC), and the company could pursue an initial public offering (IPO).

XRP’s price charts suggest the token may be forming risky patterns, which could indicate further downside. On Tuesday, XRP created a shooting star candlestick pattern, often signaling a bearish reversal due to its small body and long upper shadow. Additionally, a double-top pattern may be forming at the $2.89 mark, with the neckline at $1.8958, indicating a potential price decline if the pattern holds.

Given that XRP is still significantly above its 50-day moving average, there is a risk that the price could continue to decline in the coming days. However, a move above the $2.89 level, which represents the token’s year-to-date high, could signal a reversal and further upward momentum.