The Ripple price has declined by more than 5% today as the overall sell-off of cryptocurrencies gains steam. The XRP price is trading at $0.4745, which is more than 8% below its yesterday’s high.
What happened: Risky assets like cryptocurrencies, emerging market currencies and tech stocks have been relatively volatile recently. This is mostly because of the overall performance of US bonds. The shorter and longer-term dated bonds have declined this week, pushing their yields to the highest level in more than 13 months as shown below.
US bond yields have risen
Investors pay close attention to the bond market because of its accuracy of predicting future events. For example, the inversion of the yield curve in 2019 was followed by a recession in 2020.
The rising yields seems to suggest that the Fed may move to increase interest rates ahead of schedule. This is mostly because the upcoming $1.9 trillion stimulus package will likely overheat the economy and lead to high inflation.
The XRP price is also falling because of the ongoing legal issues and the recent decision by MoneyGram to pause its relationship with Ripple. This decision will likely have a negative impact on Ripple’s business strategy.
On the daily chart, we see that the Ripple price declined to a low of $0.1733 after the SEC announced its investigation. It then rebounded by more than 300% between December and February. Recently, though, the price has been relatively volatile. It has also formed what appears like a bullish pennant pattern that is shown in red. It is also between the middle lines of the Bollinger Bands.
In my view, the XRP price could rebound in the near term. If this happens, the key level to watch is the Feb 22 high at $0.6488. Still, because of the ongoing volatility, there is also a possibility that the currency will retest the $0.3600 support level.
