XRP Drops Toward $1.04 as U.S. Senate Shelves Clarity Act and Fed Decision Looms

Political gridlock in Washington and macroeconomic uncertainty from the Federal Reserve have combined to put severe pressure on digital asset markets, leaving major altcoins vulnerable to further downside. XRP, the native token associated with payment provider Ripple, has fallen nearly 8 percent over the past week to trade around $1.06, with a market capitalization hovering near $65 billion.

The immediate catalyst for the downturn stems from the U.S. Senate’s decision to shelve the Clarity Act ahead of its scheduled August 7 recess. Lawmakers chose instead to prioritize federal judicial nominations and a pending Russia sanctions package, effectively closing the brief legislative window needed to pass broad crypto regulatory reforms this year.

Institutional market participants view the Clarity Act as a vital legal cornerstone. By establishing a clear statutory definition for XRP as a commodity, the bill would provide the regulatory certainty required by commercial banks, asset managers, and institutional custodians to launch mainstream financial products. Investment bank Standard Chartered had previously outlined an $8 long-term price target for XRP, though that projection was explicitly contingent on full Senate approval alongside estimated institutional ETF inflows ranging between $4 billion and $8 billion.

Without a Senate floor vote before recess, regulatory clarity could remain stalled through the upcoming midterm election cycle, potentially pushing any comprehensive legislative action out until 2027. This marks a sharp reversal from earlier optimism, when compromise on the bill’s ethics provisions briefly pushed approval odds on prediction markets to 43 percent and lifted XRP to $1.1485 on July 21.

Compounding the political setback is heightened anxiety surrounding monetary policy. Federal Reserve Chair Kevin Warsh is preparing for his second Federal Open Market Committee meeting, where officials are broadly expected to maintain the benchmark interest rate at 3.50%–3.75%. However, volatile market expectations tracked by the CME FedWatch Tool recently reflected a 38 percent probability of a rate hike—the highest seen during this tightening cycle.

A hawkish stance or unexpected dissent within the FOMC could further depress risk-on assets across the board. The broader crypto market is already displaying signs of fatigue, with Bitcoin remaining anchored between $63,400 and $64,000, well below its June peak near $80,000.

From a technical perspective, XRP continues to trade inside a prolonged downward channel that originated after its mid-2025 peak near $3.40, recording a 24-hour range between $1.0450 and $1.0679 on Binance.

On-chain and chart metrics show overwhelming bearish alignment across multiple timeframes. The token’s 50-day exponential moving average remains positioned below its 200-day EMA—a structural pattern known as a death cross that indicates sustained medium-term downward momentum since the token slid from its $3.65 all-time high. Meanwhile, the Average Directional Index sits at a subdued 11.2, down from 13.3 earlier in July, signaling an exceptionally weak trend environment prone to directionless consolidation and choppy trading.

XRP’s Relative Strength Index currently rests at 40.9. While firmly in negative territory below the neutral 50 threshold, it remains above the 30 level that defines deeply oversold conditions, suggesting sellers still retain room to push prices lower.

Should macroeconomic pressure intensify, immediate Fibonacci support rests at $1.0450, followed by lower downside targets at $1.0125 and $0.9711. Conversely, if the Federal Reserve delivers a dovish rate guidance that sparks a broader market relief rally, upside resistance sits in the $1.10 to $1.12 Fibonacci recovery zone.