Fed Rate Hike Could Hit XRP Hard: ChatGPT Reveals How Low Ripple’s Price Could Go

The monetary landscape in the United States changed in the past week or so, first after the hawkish stance taken by the current Federal Reserve Chairman, Kevin Warsh, and then following last Friday’s strong US jobs report.

As such, the expectations have changed, with investors and experts pricing in a potential rate hike for the next FOMC meeting scheduled to take place on September 15-16. After answering how this could impact BTC, we turned our focus to XRP, whose case was described as “arguably more interesting than bitcoin’s,” by ChatGPT.

What Happens to XRP Then?

With the current odds on prediction markets at well over 50% for a rate hike in September, the warning signs for risk-on assets are fully flashing. This was felt on Friday briefly after the jobs report, with BTC dropping by $3,000 and XRP slumping from $1.45 to under $1.40, where it found support.

ChatGPT estimated that the cross-border token is likely to react “more violently to a Fed hike” even though it has two cushions: strong ETF demand and the CLARITY Act process. The initial reaction to a 25 bps increase on September 16 would be a 4%-8% decline, the AI predicted. From the current levels, this would materialize in a dip below $1.30.

The situation could worsen in the following days and weeks, with $1.20 emerging as the first major support to be tested. If Warsh takes an even more hawkish approach in his post-FOMC meeting speech, XRP could “fall further toward $1.05-$1.15.”

One of the cushions mentioned above, the CLARITY Act, has not made any real progress lately. It was delayed once again in early August, and its September vote, scheduled for just a day before the conclusion of the FOMC meeting, is no longer guaranteed after the latest developments. As such, XRP could be primed for even more painful performance in case of a rate hike.

The Dark Horse

ChatGPT believes that the spot XRP ETFs could be the silver lining for the underlying asset, as they have remained relatively solid even during market distress, and their performance has picked up after the August rally. The cross-border token could quickly bounce after the initial shock if the Fed signals no immediate second hike and the ETF demand is still intact.

If that’s the case, $1.50-$1.60 will come into focus as this level has halted many of XRP’s previous breakout attempts. However, if the Fed surprises the market and raises rates by 50 bps, while Warsh goes fully hawkish, the altcoin’s future could quickly deteriorate, with another leg down to and even below $1.00, ChatGPT warned.