XRP has fallen below the key $1.30 level after losing 7.3% on Tuesday, with the cryptocurrency now trading near $1.30 amid significant investor concerns about its valuation. Dubai-based crypto investor Royal Kane has ruled out buying XRP at its present valuation, citing the token's $81.68 billion market capitalization as the main reason for his position. Kane argued that assets with lower valuations may offer more room to benefit from a strong investment story, pointing to examples like Solana's earlier "Ethereum killer" label and Zcash's adoption case. The investor told investors to "find a coin with a compelling narrative for the coming years," rather than presenting a specific price target for XRP.
XRP has recovered to trade near $1.30, gaining up to 1% despite facing significant derivatives market pressure, with open interest falling from $1.128 billion in late August to $871.22 million at current levels. The cryptocurrency's resilience comes as $9.67 million in liquidations occurred over the past 24 hours, split almost evenly between longs ($4.87 million) and shorts ($4.80 million), according to latest data. This represents a 23% decline in open interest or $257 million in just under a month, yet the spot price continues to hold above key support levels. The recovery suggests that while derivatives traders are reducing leverage, positive funding rates and balanced positioning are supporting the price action, with Binance's OI-weighted funding rate remaining positive and the overall 24-hour long/short ratio at 0.9904, close to balanced.
The Federal Reserve raised interest rates by 25 basis points on September 16, taking the target range to 3.75% to 4%, which has added pressure on risk assets including cryptocurrencies. The unanimous decision delivered the first U.S. rate increase since 2023, with projections showing that 12 of 18 officials expected additional increases during the year. Higher interest rates can increase returns on U.S. government debt and money-market products, giving American investors more yield-bearing alternatives to cryptocurrencies. Additionally, the U.S. Senate rejected cloture on the Digital Asset Market CLARITY Act on September 15, with the motion receiving 49 votes in favor and 50 against, falling 11 votes short of the 60 needed to open formal debate. The legislation would have divided oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission, with its treatment of network tokens potentially affecting how XRP and other crypto assets are classified in U.S. markets.
XRP ETFs attracted $3.5 million on September 16 through Franklin Templeton's XRPZ fund, extending a ten-day inflow streak even as the price declined that day. This contrasts sharply with broader crypto ETF outflows, as Bitcoin ETFs saw $295 million in outflows and Ethereum ETFs lost $224 million over the same period. The ETF inflows demonstrate that spot demand remains robust despite the derivatives market deleveraging, with XRP becoming one of the few crypto ETF categories still attracting net buyers. U.S. spot XRP exchange-traded funds attracted $153.55 million during August, including $150.28 million over its final two weeks, while XRP Ledger payment volume rose 521% in one week, driven by larger transfers rather than an increase in transaction count. This spot demand provides crucial support for the price recovery, as traders reduce futures exposure while maintaining underlying confidence in the token's long-term prospects.
XRP is currently trading just above the critical $1.29 support level, which aligns with the 20-week EMA and 0.382 Fibonacci retracement level. The cryptocurrency is sitting mid-range inside an 8-hour parallel channel bounded by descending resistance and support lines that have contained price movement for weeks. A daily or weekly close below $1.29 would break both the 20-week EMA and Fibonacci confluence, putting the psychological $1 support zone back in play. On the upside, clearing $1.40 would break the descending channel resistance and open a path toward $1.60–$1.70, closer to the 50-week EMA. The current price action shows XRP trading just above the channel midline between $1.30 and $1.35, with the $1.3059 level representing the immediate resistance zone. The token has dropped 23% from its recent peak near $1.68 and is down 29.18% since the start of 2026, reflecting the broader market pressure from macroeconomic conditions and regulatory uncertainty.
