XRP Faces 40% Drop as Trump Tariffs Fuel Inflation Fears

The XRP market is currently displaying warning signs, with a bearish technical pattern emerging on its weekly chart. This pattern coincides with broader macroeconomic pressures, particularly the anticipated 25% tariffs on auto imports by President Donald Trump, set to take effect in April. These tariffs are expected to increase prices for US manufacturers and consumers, contributing to inflation. The February 2025 US CPI report already indicated a 0.2% month-over-month increase, and St. Louis Federal Reserve President Alberto Musalem estimated that these tariffs could add approximately 1.2 percentage points to inflation.

Since its late 2024 rally, the XRP price chart has been forming a descending triangle pattern. This pattern is characterized by a flat support level and a downward-sloping resistance line, which is typically seen as a bearish reversal indicator. If the price breaks below the support level, it could fall by as much as the triangle’s maximum height, potentially dropping to around $1.32 by April, a 40% decrease from current levels. This target aligns with veteran trader Peter Brandt’s prediction of a possible decline to as low as $1.07 due to a head-and-shoulders pattern on the daily chart.

Conversely, if XRP rebounds from the support level, it could rise toward the upper trendline at around $2.55. A clear breakout above this resistance level could invalidate the bearish structures, potentially sending the price toward the previous high of $3.35. However, the broader market's caution in response to the tariffs and the reduced likelihood of a June rate cut by the Federal Reserve could amplify the sell-off in XRP. The probability of a rate cut to a target range of 400–425 basis points in June has fallen to 55.7%, down from 67.3% a week earlier. A delayed rate cut would reduce capital flow into speculative markets, stalling momentum for XRP and other digital assets that thrive in a low-rate, risk-on environment.