XRP faced selling pressure on Saturday, with its price settling near $1.42, marking a decline of roughly 5% from the previous session. The asset experienced significant intraday volatility, swinging between approximately $1.39 and $1.51. This move extends a challenging week for the cryptocurrency, which has fallen 22% over the past seven days.
Liquidity and Macro Concerns Drive Swings
Analysts point to diminished market liquidity as a key factor behind the sharp price movements. Reduced market depth means even modest trades can cause outsized price jumps. Broader uncertainty surrounding U.S. monetary policy is also contributing to investor caution. The Federal Reserve recently held its benchmark interest rate steady in the 3.50%-3.75% range, with officials emphasizing a data-dependent approach amid concerns that progress on inflation has stalled.
Broader Crypto Market Volatility
The volatility was not confined to XRP. Bitcoin staged a recovery, climbing back above the $70,000 level on Friday after briefly touching a 16-month low near $60,018 earlier in the day. Ether also saw a strong rebound, rallying about 12% from a recent multi-month low. This turbulence spurred significant activity in options markets, with traders placing heavy bets on further potential declines in bitcoin prices.
Ripple's Institutional DeFi Push
Amid the market turmoil, Ripple is advancing its infrastructure strategy. The company recently published an "Institutional DeFi" roadmap for the XRP Ledger. The plan includes developing a permissioned decentralized exchange (DEX) with integrated compliance features and a new native lending protocol slated for release later this year. Industry proponents describe this initiative as a transformative step for bringing institutional capital on-chain.
Looking ahead, traders are closely monitoring upcoming U.S. economic data, including the jobs report and Consumer Price Index figures, for clues on the Fed's policy path. Meanwhile, Ripple has scheduled a virtual XRP Community Day for February 11, an event that has historically influenced market sentiment with new announcements.
