XRP down 2.62% to 1.5767. The Federal Reserve maintains 3.75%, with the March rate cut probability dropping to 8.4%. The White House stablecoin meeting ended without consensus, and Bank of America warns that $6 trillion in deposits may flow into DeFi. ETF weekly outflows amount to $52.26 million. The key support at $1.50, breaking below tests $1.0.
Federal Reserve March rate cut probability plummets to 8.4%
The core negative news for XRP today comes from the rapid decline in expectations of a rate cut by the Federal Reserve. Last week, the Fed kept interest rates steady at 3.75%, and Chair Jerome Powell hinted at adjusting policy stance based on specific meeting conditions. Powell pointed out that inflation remains high and the labor market is strong, so the likelihood of a rate cut in the near term is low. Since Powell made these comments, US producer price index data shows inflation outlook remains resilient, and manufacturing has returned to expansion, supporting a more hawkish stance from the Fed.
According to CME FedWatch data, the probability of a March rate cut has fallen from 17.3% on January 27 to 8.4% on February 3. Meanwhile, influenced by Powell’s remarks and US economic data, the probability of a rate cut in June has decreased from 65.4% to 56.1%. This sharp shift in expectations has directly impacted risk assets. As a highly volatile crypto asset, XRP’s opportunity cost of holding in a high interest rate environment has significantly increased.
When markets expect the Fed to keep rates high longer, institutional investors will reallocate portfolios, reducing holdings in high-risk assets like XRP and increasing fixed income products such as US Treasuries. The chance of a rate cut in March dropping from 17.3% to 8.4% indicates the market now sees the likelihood of a hawkish Fed stance rising from 82.7% to 91.6%. This marginal change in expectations is enough to trigger capital outflows from XRP.
Optimistic US economic indicators and Fed comments continue to suppress expectations of a rate cut in the first half of 2026, dampening market sentiment. When economic data is strong, the Fed has no reason to cut rates, which is a structural negative for cryptocurrencies that rely on loose liquidity. Only when economic data weakens significantly or inflation drops sharply will rate cut expectations reignite. Until then, XRP today will remain under pressure from the hawkish Fed shadow.
White House stablecoin meeting fails to reach consensus, bill stalls
Another core negative for XRP today is the delay in the market structure bill. On February 2, the White House held a cryptocurrency meeting with representatives from banking and crypto sectors to discuss the draft text of the Senate Banking Committee’s stablecoin yield bill. However, there was no substantive progress toward consensus, indicating the committee’s review process will face challenges.
In January, Coinbase (COIN) withdrew support for the Banking Committee’s “Market Structure Bill” draft. CEO Brian Armstrong warned that the draft would kill the incentive mechanisms for stablecoins and allow banks to prohibit transactions with competitors. This public split reveals serious disagreements within the crypto industry over the bill’s content, making legislative prospects more bleak.
The issue hinges on whether banks will accept stablecoin yields that far exceed traditional bank deposit rates, risking large outflows of deposits from US banks. Banks rely on customer deposits as low-cost funding to lend at higher rates to retail and corporate borrowers. The difference between deposit rates and loan rates, known as net interest margin (NIM), is fundamental to bank profits and underscores the importance of retaining deposits.
Crucially, if depositors shift to DeFi, banks will be forced to rely on alternative financing channels, such as wholesale funding. Higher financing costs will erode NIM and bank profitability. Previously, Bank of America CEO Brian Moynihan warned that if legislation allows stablecoin yields, over $6 trillion in deposits could flow from traditional finance (TradFi) into DeFi. This $6 trillion warning is the core reason banks strongly oppose stablecoin yield proposals.
Core conflict in stablecoin yield debate
Bank stance: Ban stablecoin yields to protect $6 trillion deposits from outflow
Crypto stance: Allow market-driven yields, free competition to serve users
Regulatory dilemma: Balance financial stability and market innovation, a tough choice
Negotiation deadlock: No consensus at White House meeting on February 2, bill stalls
Given the prolonged SEC vs. Ripple lawsuit concluded in August, XRP remains highly sensitive to regulatory developments. The token’s price plummeted from a high of $2.4151 on January 6 to a low of $1.5021 on January 31, reacting to delays in voting by the Senate Agriculture and Banking Committees. XRP’s price movement highlights the importance of the banking committee draft, which could be a more significant piece of legislation for DeFi.
ETF weekly outflows of $52.26 million signal supply-demand imbalance turning bearish
(Source: SoSoValue)
Importantly, the weakening expectations of a Fed rate cut in the first half of 2026, combined with the delayed crypto legislation, have cooled demand for XRP spot ETFs. On February 2, US XRP spot ETF market experienced net outflows of $410,000, following a previous week’s total net outflow of $52.26 million. Notably, the decline in spot ETF demand has tilted supply and demand toward the bearish side, supporting a short-term downside outlook.
Despite recent capital outflows, since trading began in November last year, the US XRP spot ETF market has accumulated net inflows of $1.18 billion. Strong capital inflows contrast sharply with the massive outflows from US Bitcoin spot ETFs, supporting a medium-term bullish trend. This accumulated net inflow remains a positive factor in XRP news today.
Technical analysis: $1.50 critical support determines trend
(Source: Trading View)
On February 3, XRP fell 2.62%, erasing the previous day’s 1.90% gain, closing at $1.5767. Ongoing selling pressure has driven XRP’s price well below its 50-day and 200-day moving averages, indicating a bearish bias.
XRP key technical levels
Support: $1.50, if broken, tests $1.0 psychological level, then breaks to test $0.7773 (October flash crash low)
50-day moving average resistance: $1.9279
200-day moving average resistance: $2.2370
Upper resistance levels: $1.75, $2.0, $2.5, $3.0
The January reversal signals a shift away from the bearish trend and negates short-term bullish expectations. However, XRP remains above $1.50, which is a critical support level. If it breaks below $1.50, it will confirm a short-term bearish outlook and validate the bearish structure.
Conversely, on the daily chart, if the price breaks above $1.75, bulls will target the 50-day moving average and $2.0. Continued breakout above the 50-day moving average and $2.0 would suggest a short-term trend reversal to bullish. After the trend reversal, the price could test $2.2. If it breaks above $2.2, the 200-day moving average will become the next target.
