Investor Sentiment Freezes Amid Macroeconomic Deterioration... Will XRP Fall Below $1?

▲ XRP decline/ChatGPT-generated image ©

Despite the U.S. Federal Reserve’s positive proposal for a derivatives risk model and optimistic forecasts from artificial intelligence, experts have issued a stern warning that XRP (XRP, Ripple) could fall below $1. Analysts say that as investors flee to safe-haven assets amid mounting macroeconomic pressures, real-world utility alone may not be enough to prevent further price declines.

According to crypto-focused outlet CCN on February 16 (local time), growing macroeconomic uncertainty is threatening XRP’s key psychological support level. Adam Spatacco, an analyst at investment media outlet The Motley Fool, stated that during periods of heightened macroeconomic stress, liquidity flows tend to outweigh fundamentals, meaning XRP’s price could converge toward $1 or even lower.

Spatacco noted that the opportunity cost of holding volatile assets may be reaching its limit, potentially fueling strong selling pressure. If the downtrend continues, it would suggest that expectations about the token’s market fit alone are no longer sufficient to sustain a high valuation. He added that investors will increasingly demand more visible market share expansion in terms of infrastructure utilization.

This bearish momentum comes as Federal Reserve staff proposed the creation of a dedicated crypto risk asset class within the International Swaps and Derivatives Association’s standard initial margin model for derivatives trading, explicitly listing XRP alongside Bitcoin (BTC) and Ethereum (ETH). While social media has celebrated the move as a major milestone for institutional adoption, experts caution that it does not equate to formal regulatory approval or endorsement.

Analyst Victor Olanrewaju assessed that although the Fed’s proposal could be positive in the long term, extremely low market participation and investor sentiment make it difficult to trigger a short-term technical rebound. Meanwhile, Grok, the artificial intelligence integrated into Elon Musk’s X platform, drew online attention by predicting a price of $15.57 for March and December this year. However, experts pointed out that such projections are merely outputs tailored to user prompts and that a dominant wave of buying comparable to Bitcoin’s is unlikely to materialize in the near term.

David Schwartz, former chief technology officer at Ripple, also expressed skepticism regarding recent unrealistic bullish forecasts ranging from $50 to $100. However, he recalled having once sold his coins at $0.10 believing prices would not rise, and having considered Bitcoin surpassing $100 an impossible dream, leaving room for the possibility that the crypto market can at times defy individual expectations with extraordinary moves.

Disclaimer: This article is provided for informational purposes only and does not constitute investment advice. The publisher assumes no responsibility for any investment losses resulting from reliance on this content.