XRP held back by ‘two forces’ analyst says as traders bet on price to plunge

XRP has a lot going for it.

The cryptocurrency is intimately linked to Ripple, the company whose founders developed it, and the venture’s fortunes.

But despite Ripple having notched several big wins over the past year, XRP is still trading 62% below its $3.65 record high from July.

“XRP is basically being held back by the same two forces that have capped most large-cap alts in this regime: macro noise and flow quality,” Louis De Backer, crypto trading analyst at financial services platform Marex, told DL News.

His comments come as the US’ conflict with Iran weighs on the global market. With talks between Washington and Tehran at a standstill, the flow of oil through the Strait of Hormuz has catapulted the commodity’s price above $114 per barrel.

Elevated energy prices make it increasingly unlikely that the Federal Reserve and other central banks will cut interest rates. High interest rates are seen as a headwind for cryptocurrency prices.

“With energy at four-year highs and the Fed messaging more divided, risk budgets stay tight and investors default to BTC first, then ETH,” De Backer said. “In that tape, XRP tends to behave like beta, it moves with the complex but struggles to attract fresh standalone demand.”

If the macroeconomic environment was to calm down, that would enable traders to move beyond Bitcoin and Ethereum and start to trade with altcoins like XRP, De Backer said.

“The second constraint is positioning versus spot depth,” De Backer said. “When…