Ripple's Business is a Huge Success... XRP Worries About 'Falling to $1' Amid Soaring Oil Prices and Interest Rate Fears

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Ripple has experienced a series of business boons, including recording its highest-ever corporate valuation and resolving regulatory risks. However, it remains trapped at a price more than 60% lower than its all-time high, hampered by macroeconomic uncertainty and a lack of liquidity.

DL News, a specialized virtual asset media outlet, reported on May 1 (local time) that XRP is trading 62% lower than its all-time high of $3.65. Louis De Backer, a virtual asset trading analyst at financial services platform Marex, diagnosed this as a problem of macroeconomic noise and flow quality. De Backer analyzed that the conflict between the US and Iran, which pushed international oil prices above $114 per barrel, has made central bank interest rate cuts less likely, putting downward pressure on the overall market.

As energy prices hit a four-year high and the Federal Reserve's policy direction diverged, investors are reducing their budgets for risky assets and fleeing to highly liquid large assets such as Bitcoin (BTC) and Ethereum (ETH). De Backer assessed that XRP is currently not generating independent demand in the market and is acting like a beta asset, passively following the overall market trend. He explained that investors would only turn their attention beyond Bitcoin to altcoins once the macroeconomic environment stabilizes.

Shallow spot market depth and a derivatives-centric trading structure were also cited as obstacles to a rally. If derivatives flows drive the market in a state of insufficient liquidity, price fluctuations are only temporary and difficult to transition into long-term trends. Currently, XRP is stuck in a box range between $1.35 and $1.45, and a sustained spot buying spree to break through resistance and establish itself is essential for a definitive rally.

Ripple has achieved remarkable results, including the conclusion of its lawsuit with the U.S. Securities and Exchange Commission (SEC), President Donald Trump's proposal to include virtual assets as strategic reserves, and cooperation with a major Korean insurance company. Its corporate value is estimated at $50 billion, more than double the market capitalization of stablecoin issuer Circle. Funds have been steadily flowing into the XRP spot ETF launched last November, but this has not translated into a substantial price rebound.

Some market participants are expressing pessimistic outlooks regarding XRP's recovery. Ric Edelman, founder of Edelman Financial Engines, analyzed that it would be difficult for XRP to regain its past glory in the current market environment. Participants in the prediction market Polymarket also show a conservative attitude, viewing the probability of XRP reaching $3.60 by year-end as a low 13%, while assessing the probability of it falling to $1 as a high 61%.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*