XRP Drops 5.3% as Hot Inflation Data Sparks Crypto-Wide Sell-Off

XRP Stumbles on Inflation Shock
XRP is under pressure, dropping 5.3% in 24 hours—a steeper decline than both Bitcoin (-3.3%) and Ethereum (-3.3%). At the time of writing, the token trades at $3.11, down from an opening price of $3.2474, as a wave of profit-taking swept through the crypto market.

The sell-off gained momentum in the afternoon, coinciding with the release of critical U.S. economic data that has reshaped expectations for Federal Reserve policy.

The Catalyst: Red-Hot Producer Prices
The trigger? A stronger-than-expected U.S. Producer Price Index (PPI), which rose 3.7% year-over-year in July—well above the anticipated 3.0% and up from 2.6% in June. On a monthly basis, prices jumped 0.9%, the largest increase in over three years.

Released by the Bureau of Labor Statistics, the data signals that inflationary pressures are not cooling as quickly as hoped—particularly in the production and supply chain sectors.

This development has forced traders to reassess the likelihood of an imminent Fed rate cut. With inflation proving sticky, the central bank may delay easing for longer, keeping borrowing costs high and reducing the appeal of risk-on assets like cryptocurrencies.

Why XRP Felt It More Than Most
While all major cryptos declined, XRP was hit harder, likely due to its sensitivity to macroeconomic shifts and its position as a high-beta altcoin. Earlier in 2025, XRP had rallied on growing optimism around regulatory clarity and Ripple’s expanding global payment network—both of which are tied to favorable financial conditions.

Now, with rate cut expectations cooling, that momentum has stalled. Traders who bought XRP in anticipation of lower rates and stronger institutional inflows are now taking profits, contributing to the sharp drop.

On-chain data shows a spike in exchange inflows and increased liquidation volume, particularly in leveraged long positions.

Market-Wide Impact and Investor Caution
The PPI report has cast a shadow over the entire digital asset market. As yields rise and the dollar strengthens, capital flows out of speculative assets. This macro-driven sell-off underscores a key reality:

Crypto is no longer immune to traditional economic forces.

Analysts note that tariff-related cost increases may be feeding into producer prices, creating broader inflationary pressure that could delay monetary easing well into 2026.

With the Fed’s next decision on the horizon, traders are likely to remain cautious. Upcoming CPI data and employment reports will be critical in determining whether this pullback turns into a deeper correction—or just a pause in the bull run.

What’s Next for XRP?
Key levels to watch:

• Support: $3.00 – a break could open the door to $2.80
• Resistance: $3.25 – previous consolidation zone
• Catalysts ahead: Potential exchange relistings, ETF speculation, and RippleNet expansion

For now, XRP’s fate is tied to the Fed. Until inflation shows a clear downward trend, volatility is likely to persist.