XRP (XRP) price is down today, falling over 5.5% to $0.59 in what appears to be the continuation of its choppy trading sessions in recent days.

XRP/USD four-hour price chart. Source: TradingView

At first glance, the downturn in XRP’s price is part of a retracement that began in March after peaking at $0.74 for that period. Since then, it has fallen roughly 18.5%, with its decline exacerbated by several other contributing factors.

U.S. manufacturing data pushes down XRP price

XRP’s price decline mirrored similar sharp drops across the crypto market as risk investors reevaluate the trajectory of the Federal Reserve’s interest rate reductions following a strong U.S. manufacturing data.

The Institute for Supply Management’s (ISM) manufacturing index increased by 2.5 points to 50.3 last month. This slight rise above the 50-point threshold, distinguishing between expansion and contraction, effectively ended a 16-month streak of declining manufacturing activity.

US manufacturing PMI data since 2022. Source: Bloomberg

The strong data suggests that the Fed might limit its rate cuts to just two this year rather than the previously anticipated three.

Source: X

Notably, the swaps market now forecasts a nearly 57% likelihood of a Fed rate cut in June and a 70% chance by September.

Target rate probabilities for June’s Fed meeting. Source: CME

Typically, lower interest rates benefit cryptocurrencies like XRP, which doesn’t yield interest, as it becomes more attractive than interest-bearing assets.

XRP whales and fishes are distributing

XRP’s price decline today and in recent weeks coincide with a drop in the number of its richest addresses.

For instance, the count of entities that hold more than 100,000 XRP has dropped 1.13% so far in 2024, indicating that either these “whales” are selling or redistributing them across other addresses.

XRP addresses with balance greater than 100K tokens. Source: Messari/CoinMetrics

The sentiment is consistent among holders of 100-10,000 XRP tokens, suggesting a decline in the number of smaller investors, often referred to as “fishes.” Conversely, the number of addresses with a balance greater than 10 XRP is increasing.

XRP addresses with balance between 10 and 100K tokens. Source: Messari/CoinMetrics

The actions of major XRP holders, especially if they decide to sell large portions of their holdings, could impact market perception and lead to a decline in trader interest.

Declining XRP dominance

Throughout 2024, XRP has lagged behind its leading cryptocurrency competitors, recording a year-to-date performance of approximately -4.5%. While the broader cryptocurrency market has experienced a significant upswing, soaring by 55.5% during the same timeframe.

That is further visible in the XRP Dominance Index (XRP.D), a metric that measures XRP’s market capitalization against that of the crypto market. The index has dropped 36.55% so far in 2024, suggesting a persistent capital outflow from the XRP to other cryptocurrencies.

XRP.D daily price chart. Source: TradingView

Primary reasons behind XRP market outflows include the U.S. Securities and Exchange Commission’s (SEC) pending lawsuit against Ripple. A U.S. District Court ruled in July that Ripple’s XRP sales worth $728.9 million to hedge funds and other institutional buyers amounted to unlawful securities sales.

Related: XRP price-to-sales ratio double that of Nvidia

Last week, Stuart Alderoty, the chief legal officer at Ripple, revealed that the SEC has requested a federal judge to impose a $2 billion penalty on the blockchain company.

XRP price analysis

From a technical perspective, XRP’s ongoing price decline is part of its fluctuations within a prevailing ascending triangle pattern.

XRP/USD weekly price chart. Source: TradingView

The cryptocurrency’s next downside target appears around the triangle’s lower trendline, coinciding with its 200-week exponential moving average (200-week EMA; the blue wave) near $0.52 by mid-April, down about 15% from the current price levels.

Conversely, a breakout above the triangle’s upper trendline could take the XRP price to $0.74, its local peak from March 11.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.